ROC crackdown spots 2,423 shell companies in Coimbatore

ROC Josekutty VE told reporters that the Ministry of Corporate Affairs (under which the 25 ROCs function across India) has decided to conduct a speedy ‘cleaning up’ process and that 3,975 more companies are likely to face the music in a month.      

The ROC said that they identified 5,766 shell companies in Coimbatore Region comprising Coimbatore, Nilgiris, Tirupur, Erode, Salem, Namakkal, Dharmapuri, Krishnagiri and Dindigul as they failed to submit statutory returns with the ROC in the last two years. 

The directors of 1,500 companies obtained loans to the tune of several thousand crores of rupees from banks and private financial institutions and most of them have become defaulters. 

Leaving those companies, the ROC Coimbatore has sent notices to the nearly 12,000 directors of these companies. Shockingly 6,000 of them have returned as the addresses to which they were sent were either fake or the directors could not be traced. 

Among the remaining 4,266 companies, Coimbatore tops the list with 2,423 shell companies, followed by Salem with 447 shell companies. In the sector-wise classification, 686 of the 4,266 companies are into business services, followed by 620 companies in finance, 512 into trading and 463 in the textile sector. 

“Names of those companies and their directors will be published on the ROC’s official website,” Josekutty said, adding, they have also sent names of the companies and directors to the Income Tax, Central Excise and Service Tax Departments to verify the status of their records. 

Aggressive legal action will also be taken against them and the bankers who had given loans to those companies and their directors, on the basis of forged documents.