Committee for Vanishing Companies

The Government has informed Lok Sabha that a 

Coordination and Monitoring Committee (CMC), 

co- chaired by Secretary, Ministry of Corporate 

Affairs and Chairman, Securities and Exchange Board of India (SEBI) 

has been set up to look into issues relating to companies that had come 

out with public issues and vanished and to monitor the progress 

of action taken against such vanishing companies and their promoters. 

Specific criteria have been adopted by CMC for 

identification of such vanishing companies.

In reply to a question Shri Salman Khirshid, Minister for

Corporate Affairs, informed the House that out of the 

companies that came out with Initial Public Offer (IPO) d

uring 1992 to 2005, a total of 238 companies were identified 

as vanishing companies.

With the continuous efforts of the Ministry/ CMC, 

117 companies have been traced back, resulting in the

number of vanishing companies being reduced to 121. 

Prosecutions have been filed against 112 vanishing 

companies and their promoters/directors under 

various provisions of the Companies Act, 1956 and 

First Information Reports (FIRs) have also been filed 

against Promoters/ Directors of 112 vanishing companies 

under Indian Penal Code (IPC). 35 directors were 

arrested and later released on bail. 

The House was informed that the field offices are pursuing

the prosecution cases in the respective courts.