5,023 directors of firms in AP disqualified by Registrar of Companies for not filing returns

The directors of these firms were found not to have filed any returns for the past three years.
5,023 directors of firms in AP disqualified by Registrar of Companies for not filing returns
5,023 directors of firms in AP disqualified by Registrar of Companies for not filing returns
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The Registrar of Companies (RoC) in Andhra Pradesh on Tuesday disqualified over 5,000 directors of companies for non-filing of annual returns and balance sheets. All 5,023 directors have been disqualified for a period of five years and their Director Identification Numbers (DINs) have also been deactivated.

Earlier, the AP RoC under the Ministry of Corporate Affairs (MCA) based out of Vijayawada had struck off 971 companies and froze their bank accounts in the state. The efforts by the RoC is part of a nationwide crackdown on shell companies used to illegally channel black money in and out of the country. The present drive to weed out shell companies or inactive companies is the third such effort in a span of two years.

The disqualified directors have not filed their returns for three consecutive years. The officials have deactivated the DINs and have barred these individuals from becoming directors in any new companies during their disqualification. DIN is an eight-digit identification number allotted for a lifetime by the Centre to a person who intends to become a director of a company.

The RoC officials warned that if one of the disqualified directors was found continuing as a director on paper they could face jail time for up to one year as well as fines up to Rs 5 lakh. "The quantum of disqualification is huge. Telangana has only 1,000 disqualifications this year. We are doing a clean sweep this time, making a year of our Andhra Pradesh operations," said an RoC official to TNM. He added that the RoC had deactivated a few DINs earlier as some persons were found collecting money and then vanishing.

When asked if those disqualified were found to be heading shell companies, the official said, “Not all of the firms identified were shell companies. In most of the cases, they exist only on paper and we are ensuring they are cleared out every year now.”

Directors of firms that are still functional have also witnessed disqualification, “So we will have to battle them in court for the foreseeable future,” said the official who pointed out that previously 971 firms had been struck off for not filing returns for two years.

A cryptocurrency entrepreneur who had received letters from the RoC over the course of 2019 for not filing any returns for three years told TNM, “My business was booming three years ago but now I don’t even make enough to come under the GST bracket. I have received emails from the RoC. I have to meet and explain things to them.” The recent ban on cryptocurrency trade by the RBI was the nail in the coffin for this entrepreneur.

The real-time freezing of accounts of the firms and directors were done through a coordinated effort by the MCA, Reserve Bank of India and the Indian Bankers Association.

Those who wish to see the names of directors who have been disqualified can find it here.

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