The corporate affairs ministry asks disqualified directors to ensure compliance or face action
New Delhi, November 1 () The Ministry of Corporate Affairs has asked disqualified directors to submit their pending legal statements and ensure compliance or else they will face regulatory measures.
As part of a larger offensive against companies suspected of being ghost entities, the ministry had disqualified many people from holding managerial positions until regulatory requirements are met.
The company registrar (RoCs) is in the process of identifying and signaling to directors that they have been disqualified for not presenting financial statements or annual statements for three continuous years from 2015-16.
All defaulting directors are advised to submit their pending statutory declarations and make the necessary compliance according to the provisions of the law or that actions would be initiated, according to a communication published on the ministry's website.
The director identification numbers (DIN) of these directors cannot be used to submit electronic forms on the MCA21 portal, he added.
Legal presentations under the Companies Law are presented to the ministry through the MCA21 portal.
Lakhs of companies have retired in recent years and a significant number of directors have been disqualified.
Sandeep Jhunjhunwala, director of Nangia Andersen LLP, said the ministry has warned those directors to complete the required legal compliance or face the wrath of the law.
This is definitely aimed at instilling a culture of compliance, increasing investor confidence and, more importantly, tightening the number of directors in default. The judgments of several higher courts against a series of petitions filed above, had made it clear that Section 164 (2) (a) disqualification would apply to disqualify the directors of the company, if it does not file annual returns for three financial years, as of April 1, 2014, he said. RAM HRS