Bank accounts of 9,625 shell companies deactivated

AHMEDABAD: Bank accounts of some 9,625 shell companies have been rendered inactive with necessary restrictions imposed on the accounts. The decision was taken in response to an advisory issued by the central financial services department. With this, the government has taken another strict measure against shell companies.
“Existing directors and authorized signatories of such struck-off companies will now become ex-directors or ex-authorized signatories.These individuals will therefore not be able to operate bank accounts of such companies till such companies are legally restored under Section 252 of the Companies Act by an order of the National Company Law Tribunal,” said the statement by the financial services department.
The department issued the notification in the evening through Association of Indian Banks. “In such cases, we usually freeze the respective accounts and no deposits or withdrawals are allowed till the government issues an advisory directing further course of action. The money is also not considered in the bank’s corpus,” said Janak Raval, secretary, Maha Gujarat Bank Employees Association (MGBEA).
“These measures are taken in the interest of revenue, thus barring all transactions through these accounts. This is very much needed as the authorized signatories and directors cannot be directly held responsible for setting afloat bogus companies and thus, to protect the money, such measures are important,” said Varis Isani, president, Gujarat Sales Tax Bar Association.
Officials of Registrar of Companies, Ahmedabad, could not be reached for comments. Besides the restrictions, banks have been advised to be extra careful while dealing with companies in general.