Shell cos' directors siphoning off funds face up to 10-yr jail
New Delhi: The government on Wednesday said directors or authorised signatories of deregistered companies who try to siphon off money from the firms' bank accounts can face up to 10 years imprisonment.
Besides, the directors of shell companies that have not filed their returns for three or more years would be disqualified from holding such position in any other firm.
The government has also identified chartered accountants, company secretaries and cost accountants associated with shell firms in certain cases. Continuing its crackdown on the black money menace, the government said identification of more shell companies is in progress and efforts are on to find the "actual beneficiaries and persons" behind such entities.
The Corporate Affairs Ministry has struck off the names of more than 2.09 lakh companies from the records as they have not been carrying out business activities for long and banks have been directed to freeze their bank accounts.
"In case the director or authorised signatory of any 'struck off' company tries to unauthorisedly siphon-off money from its bank account, he/she may attract punishment of imprisonment of not less than six months extendable to 10 years," an official release said.
The government also said that if the fraud involves public interest, the punishment would not be less than three years of imprisonment and the quantum of penalty would be three times the amount involved.
Already, the directors or the authorised signatories of such companies have been restricted from operating the firms' bank accounts.
"However, even prior to such action, if they have siphoned off any money, strict action would still be taken against them," the release said.