SUBJECT : VANISHING COMPANIES - ACTION TAKEN AGAINST COMPANIES AND DIRECTORS. 
 
ISSUED BY : PRIMARY MARKET DEPARTMENT.

SEBI under Section 11 B of the SEBI Act, has already debarred 70 directors for a period of 5 years from associating themselves in any manner with the capital markets. The orders gave such director, 15 days time to make a representation to SEBI so that the same could be considered before the order becomes effective. So far, representations have been received from only 8 directors. SEBI has given opportunity to these 8 directors for a personal hearing to present their case. 
 
In respect of other director, the orders have already come into effect. The order would mean that the directors referred are prohibited from raising resources from the capital market, deal in securities in any manner and also restricts their association with any capital market intermediary. The details of the directors and the companies are available at SEBI Web site. 
 
In respect of the other directors who have responded to our earlier show cause notices, personal hearing is being given to them as an opportunity of giving an explanation. Final orders would be issued once the hearing process is completed. 
 
Central Coordination and Monitoring Committee comprising Secretary, Department of Company Affairs, Chairman, SEBI and their officials also reviewed the various actions initiated by the 7 task forces. Based on the findings of the task force, the Department of company Affairs have initiated inspection under Section 209A of the Companies Act, 1956 in respect of 25 companies and the process of initiating inspection is in advance stage in respect of another 12 companies. Various Prosecution has been launched in respect of 43 companies by the Department of Company Affairs. Registrars of Companies have also informed the police about cases where cheating was suspected. 
 
The stock exchanges are also initiating various actions like issue of notices of prosecutions for failure to complying to the listing provisions, winding up petitions, transferring the companies to a special categories etc. in terms of the provisions of the listing agreement.