2.97 lakh non-active shell companies shut down: Goyal

The government on Friday said it has initiated “strongest action” against big time bank loan defaulters and asserted that the dispensation led by Prime Minister Narendra Modi is committed to take actions against shell companies and those defaulting in repaying loans to the banks.

Answering supplementary questions from Bhartruhari Mahtab of BJD, Corporate Affairs Minister
Piyush Goyal told the Lok Sabha during Question Hour that last four years saw immense improvement in corporate and banking governance and even big business houses have realised that repaying loans to the banks will be mandatory henceforth.

Previously, the big business houses used to think ‘repaying of loans’ was essentially a responsibility of the banks only but that perception has changed, he said.

Goyal said about 2.97 lakh ‘non-active or shell companies’ have been shut down and over two lakh additional companies are under scanner.

“These companies were only on papers and were made use for Hawala operations or such shady deals,” he said.

Asking supplementary questions, Mr Mahtab wanted to know the actions the government would initiate to improve the quality of corporate and baking governance in the country.

He also wanted to know whether there have been increase in number of corporate scams and scandals in the country lately especially after the framing of new Companies Act in 2013.

The Minister also informed the House that the government has established Serious Fraud Investigation Office to look into serious corporate frauds.

Goyal, who is also holding the portfolio of Finance, said the government has taken several
steps to improve corporate governance which include nationwide drive to strike off inactive
companies. The government has also taken steps against defaulting directors, the Minister said.


Savio Rodrigues

Savio Rodrigues Founder & Editor-in-Chief

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