Defunct companies to avail Easy Exit Scheme

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IMPHAL, May 5: Introduction of Easy Exit Scheme (EES) by the Ministry of Corporate Affairs, Government of India, 2010 under Section 560 of the Companies Act, 1956, will enhance the process for the defunct companies to avail the opportunities of getting their names struck off from the Register of Companies.

Considering this provision state government has recently decided to take over assets of the Public Service Undertakings (PSUs) including Manipur Spinning Mills, Manipur Cements Ltd. and Manipur Cycle Corporation Ltd. And also to waive off electricity dues amounting of Rs.5,76,23,329 owned by the Manipur Spinning Mill Corporation Ltd.

According to a highly placed official source three companies under the Commerce and Industries Department Manipur including Manipur Spinning Mills, Manipur Cements Ltd. and Manipur Cycle Corporation Ltd have initiated actions for availing EES, 2010 by filing electronic applications so that these now defunct companies could strike off their names from the Register of Companies.

The source also further mentioned that, the state Commerce and Industries Department, has already issued No Objection Certificates (NOC) to the above three companies for availing EES during August 20 last years. Besides, subsequent upon the filing of the application of EES under Ministry of Corporate Affairs, Government of India, the ministry has raised certain queries including the settlement/disposal of assets and liabilities of these three companies availing EES, 2010.

On the other hand with regard to Manipur Cement Ltd and Manipur Cycle Corporation Ltd, their major liabilities were earlier liquidated with the funds from the state government and it could clear some of their outstanding dues to a few departments by utilizing the remnants of funds now available with these two companies. And all arrear accounts of these two companies upto the stage of Statutory Audit have been cleared.

Further, North Eastern Council (NEC), Shillong which had sanctioned the project of Manipur Cement Ltd during 1982-83 has also conveyed its approval stating the NEC has no objection in respect of Manipur Cement Ltd., in availing the EES.

With regard to Manipur Spinning Mills Corporation Ltd., the company has multiple liabilities and six pending court cases which includes liabilities of electricity dues amounting Rs.5,76,23,392, besides there is no liabilities of its employees as the retained staffs of the Spinning Mills Corporation have been paid off at the time of their retrenchment.

The official source also mentioned that information on Spinning Mills indicates its assets to only Rs.37.31 lakhs, this could be much more as the land has been kept at book value, although the depreciation shown in respect of other items could be under reflected as it reflects only the accounting method whereas these assets are prone to pilferage etc. the liabilities in relation to personal benefits of its employees have not been indicated. So the assets and liabilities balance in respect of this corporation is not known, the official source added.

In view of the other two companies no information is available to make any observation, however, because of the fact that continuance of these 3 Companies is only going to increase the liabilities with time and with no hope of its resurrection, the best course open to the government is to allow its names to be struck off from the Register.

The source also mentioned that, in view of the above facts and circumstances and to avail the Easy Exit Scheme, 2010 successfully in respect of the above three defunct companies under state Commerce and Industries Department, including Manipur Spinning Mills Corporation Ltd., Manipur Cement Ltd. And Manipur Cycle Corporation Ltd., state government in its recent decision approved the transfer of all movable & immovable assets of the said three companies to the state Commerce and Industries department and to pay electricity dues of Rs.5,76,23,329 in respect of MSMCL as per suggestion given by the state Finance Department, the official source added.

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