KYC = Know Your CHEATS

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Nirav_Modi_PNBThe 48-month old NaMo Sarkar is ready with its next big scheme to crackdown on shell companies (after a massive crackdown already carried out post demonetisation), in order to clean up corporate India, and to prevent those in top management from fleeing India in fear of being prosecuted.

The Union Ministry Of Corporate Affairs (MoCA) is set to launch a mega drive to do a KYC of company directors that will (at the bare minimum) include passport, PAN number and contact details. All of this information will have to be updated annually by the company secretary or chartered accountant at the time of filing annual financial statements. There will be a separate form for foreign nationals, but even they will have to be registered with MoCA.

Besides this KYC, there will be another form for the physical address of the company, which will also have to be updated annually by the company secretary. This is being done to crackdown on the creation of new shell companies.

The MoCA Secretary said that, in this mega KYC initiative, as many as 33 lakh company directors would be registered.

Both these forms – the physical address of the company and the other on all requisite information on company directors – would have to be “religiously and diligently” updated by the chartered accountant and/or by the company secretary.

This is one of the ideas that has come about after the Nirav Modi-PNB scam. The mega KYC drive can be rolled out any day.

The Serious Fraud Investigation Office (SFIO) of the Government of India has drawn up a list of over 113,000 shell companies that still exist. It has red-flagged more than 80,000 of these companies, and confirmed illegal activities in 16,537 companies.

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