Ministry on alert for vanishing cos: Govt

The govt has placed an early warning system to check aberrant behaviour by any company.

The government has placed an early warning system to check aberrant behaviour by any company to protect the interest of investors,Corporate Affairs Minister Salman Khurshid said.

“The Department of Company Affairs has introduced early warning system and is closely observing any aberrant behaviour of any company,” Khurshid told reporters.

He also said that the ministry was tightening the prosecution procedure for bringing the errant companies to book.

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Kicking off the Investor Week programme,Khurshid said that financial literacy was key to deepening of the capital markets.

He said that only two per cent of domestic household savings was channelised to the capital market.

To increase the penetration,the ministry had published booklets on financial literacy in 12 regional languages besides English and Hindi,Khurshid told the event organised by Ficci.

West Bengal finance minister Asim Dasgupta asked Khurshid to initimate the state government before granting registration to any company.

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He said it was important for state government to take legal action against vanishing companies which were raising funds from the public and subsequently cheating them.