One-third of 80,000 public limited companies not filing annual returns

The Corporate Affairs Ministry said that around 30% of the
80,000 public limited companies are not filing their annual returns. The
Ministry has asked the Registrar of Companies (RoC) not to strike off the
names of companies by classifying them as defunct, even if they have not filed
their annual returns for three years. This is to find out if any of such
companies have committed violations of law.

The Ministry has developed an Early Warning System to find
out if any Satyam-like frauds are happening in any company. The Early Warning
would be sounded if a company’s profits show an absurd jump (that is, if they
exceed a certain threshold limit) or if companies cite absurd values regarding
their related party transactions. Besides, the warning would be sounded if a
company has huge cash balances remaining unutilised for several years, he
said. The official said the Ministry has asked RoCs and Regional Directors to
spread awareness about the advantages of getting a company listed. “Listed
companies have a better corporate profile and they have more borrowing
opportunities,” he said.

(It appears that the Authorities were sleeping all these
years — they acted only as filing clerks !)

(Source : Internet & Media Reports, 28-10-2009)