Union Minister P P Chaudhary on Thursday said that more than 4.5 lakh directors will likely face disqualification, for being associated with shell companies, in a bid to fight against black money.
The minister however, assured that genuine companies will not face action, but said that non-compliant companies are also destroying the image of good corporates, Economic Times reported.
As the government is now putting in more effort to crackdown on shell companies, the minister said that the profile of all disqualified directors will be thoroughly examined.
"It shall also be important to examine their (disqualified directors) general profile and association with other companies and the levels of their corporate governance standards," said P P Chaudhary.
Last month, the Ministry of Corporate Affairs, in an attempt to improve corporate governance, has disqualified more than two lakh directors from holding posts in the companies that have defaulted loans and have failed to file their financial returns for last three years.
That move pushed the total number to more than 3 lakh while cancelling the registration of another 10,000 companies. These directors will not be allowed to hold seats in other companies and might have to resign from their posts soon in the future.
In September, the Registrar of Companies (ROC) had struck off the names of 2.1 lakh companies after about 2.97 lakh companies received notice for not filing returns and not completing other formalities related to compliance.
The government had also frozen their bank accounts to check any siphoning off of funds.
According to the reports, Central Bureau of Investigation (CBI) also registered a case against 19 companies which reportedly sent more than Rs 424 crore in foreign remittances via 700 transactions, in what is being suspected to be money-laundering through shell companies.
In August, market regulator Securities and Exchange Board of India (SEBI) asked stock exchanges to take action against 331 shell companies after the Ministry of Corporate Affairs named these shell firms on its list for their engagement in money laundering and tax evasion.
SEBI, last month updated its board on action being taken against suspected shell firms, vowing to take appropriate steps against those indulging in falsification of books. The regulator also told its board that steps were being taken to fasttrack all pending cases in a timebound manner, especially those where final orders have got delayed for more than a year since interim directions were passed.
Such a heavy crackdown on various companies involved in loan defaulting and money laundering has intensified after the demonetisation drive, where Prime Minister Narendra Modi scrapped off Rs 500 and Rs 1,000 notes last year to wipe out black money from the system in order to counter corruption.
