As the 911 companies are still listed, the Sebi is investigating and may ask the BSE and National Stock Exchange to delist them so that the MCA can strike them off.
As for the remaining firms, the Registrar of Companies (RoC) has been asked to go to the recorded addresses and verify if they exist or if they are bogus companies. If found to be on-paper firms, these would be struck off by the MCA. While action against unlisted companies can be taken by the ministry of corporate affairs, listed companies can only be reprimanded by the Sebi.
Officials from the MCA state that after various rounds of striking off companies conclude, only 400,000 are likely to be active in the actual sense. This is nearly half the count with RoC currently. The RoC struck off 226,000 companies in the first list and then issued notices to 225,000 in the second phase of clearing the menace of shell companies.
After the government struck off 226,000 companies in the first phase, 1.1 million companies remained active with the RoC.
Once the second phase is completed by the MCA, nearly 500,000 companies would be off RoC rolls.
Meanwhile, in the first list of companies, which were struck off and then the MCA began collecting information about their transactions from banks, it was found that 80,000 of them did not have PAN. PAN is essential for any transaction of more than Rs 50,000. So far, the government has transaction details of only 73,000 firms. These deposited Rs 240 billion at the time of demonetisation.
Meanwhile, the tax department is investigating shell companies that have tax liabilities. It had asked the corporate affairs ministry to get back these companies to the RoCs so that investigation can continue. The tax department had also asked the corporate affairs ministry to keep the taxmen updated before striking any company off the rolls.