Scrutiny inspection and investigation in all winding up cases

With the practice of filing winding up petition being followed by companies having committed major violations under Companies Act, 1956 and misappropriation of funds, Ministry of Corporate Affairs vide its latest circular no. 55/2011 dated 26.07.2011 has introduced a new procedure to curb such malpractices:

3. The moment winding up petition is filed before the Court, Official Liquidator (OL) will obtain a copy of petition and forward the same to the Registrar of Companies (ROC) concerned.
4. ROC will have a scrutiny of the details/documents available in respect of the company in MCA21 registry and will submit a preliminary report to the Ministry within a week time for inspection or investigation, if so required, containing following information for the past five years of the date of filing of petition:- 
1. History of the company, viz incorporation, maintenance of registered office, main object and present business activities;
2. Management pattern, including details of directors/nominee directors and their directorship in other companies;
3. Capital structure and shareholding pattern
4. Financial position and working results;
5. Comments on filing position and compliances of Schedule VI read with Accounting Standards;
6. Nature of complaints registered on MCA-21, their nature and any noticeable findings;
7. Whether any complaint was received alleging that the company is involved in fraudulent activities, siphoning of funds etc. If so, the details thereof.
8. Whether any scrutiny/inspection was carried out, if so, the details thereof;
9. Whether the company is having any holding or subsidiary company, if so, details thereof;
10. Whether company has raised funds through IPO, if so, the utilization of amount collected, compliance of provisions of the Act for deviation from the object stated in Prospectus/Offer Document; transactions with related parties;
11. In case of public company, whether it has accepted public deposit. If so, whether the payment of matured amount including interest was made as per schedule. In case any amount is still pending, the details of amount and interest thereon.
12. The quantum of unsecured loan amount and related party transactions thereto.
13. Secretarial reports and qualifications made by the auditors on accounts of the company;
14. Whether company or its members/creditors have requested for investigation into the affairs of the company, if so, the details thereof

Further, in case of companies wherein any inspection or investigation as per the relevant provisions is pending of the Companies act, 1956, ROC is required to complete the same and provide a report to the Official Liquidator within 30 days which shall be placed before the Hon’ble court for seeking appropriate action.

Moreover, strict action shall be initiated against director, ex-director and key management of the company for any violation of law/ Companies Act, 1956.