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Investigations into the vanishing companies have yielded good results in Gujarat. The state police has registered FIRs in all the 27 cases filed with them. A number of promoters/directors of the vanishing companies have been arrested. Two directors/promoters of M/s Frontline Financial Services Ltd. were arrested early last month. FIRs have been registered against them. In the same month, one promoter/director of M/s Kome-on Communication Ltd. was also arrested. Two promoters/directors of M/s Lyons Industrial Enterprises Ltd. were arrested on May 2. Four directors/promoters of M/s Shreeji Dye-chem Ltd. were taken into custody in September-October last year. Likewise, four directors/promoters of M/s Kesar Greenfield were arrested on different dates between September and December, 2004. All the four promoters/directors of M/s Protech Circuit Breakers were taken into custody on different dates during 2003-04. Chargesheets have been filed against all the four promoters/directors of M/s Tirth Plastic Ltd. The Ministry of Company Affairs expects that the action taken by the Gujarat police would not only bring the guilty to book but also have a deterrent effect for unscrupulous promoters/directors in future.
One of the constraints being faced by the investigating agencies is the lack of interest on the part of individual investors, investor associations, non-governmental organizations (NGOs) and voluntary organizations (VOs) active in this field. They do not come forward with the specific complaints against the fraudulent companies and their promoters/directors who have vanished after raising money through public issues. The Ministry has directed its regional directors to motivate the NGOs involved in investor protection to lodge their complaints with the investigating agencies for remedial action.
SMK/ls
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