G.N.Bajpai, - (1.) A Co-ordination and Monitoring Committee (hereinafter referred to as the 'CMC') was set up jointly by the Department of Company Affairs (hereinafter referred to as 'the DCA') and the Securities and Exchange Board of India (hereinafter referred to as 'SEBI') in 1999 in respect of companies which raised money from the public and which are not traceable. These companies are identified as vanishing companies. Seven Task Forces for each region were also set up consisting of DCA Officers, SEBI Officers and the concerned Stock Exchange Officials to assist the CMC in identifying vanishing companies in the region and recommending the action to be taken by DCA and SEBI against such companies.
(2.) In the fifth meeting of the CMC held on 1.7.2000, the criteria for identifying vanishing companies has been laid down as under: Companies which have not complied with listing requirements / filing requirements of Stock Exchange / Registrar of Companies respectively for a period of 2 years. Where no correspondence has been received by the Exchange from the company for a long time. Where no office of the company is located at the mentioned registered office address at the time of Stock Exchange inspection. In the fourteenth meeting of the Calcutta Task Force held on 2.4.2002, 30 identified vanishing companies were in the Eastern Region of which two were in liquidation and 19 were traceable. The remaining 9 companies were found to be non-traceable by the Task Force. This included Universal Vita Alimentare Limited (hereinafter referred to as UVAL). Public issue by Universal Vita Alimentare Limited UVAL came out with a public issue of 18,00,000 equity shares of Rs 10/- each for cash at par through a prospectus dated 23.3.92. The issue opened on 22.4.92, the earliest closing date was 25.4.92 and the latest closing date 2.5.92. It has been stated in the prospectus that applications have been made to the Stock Exchanges at Bhubaneswar, Ahmedabad, Bombay and Calcutta for listing of the shares. In page 10 of the prospectus, it was stated under the head "Project" that the company has implemented the project for manufacture of enriched fortified convenient Pasta foods at 17-B, Balagopalpur Industrial Estate, Balasore, Orissa. The company has acquired leasehold land of 2.75 acres from Industrial Development Corporation of Orissa. The company has a total constructed area of about 30,000 sq. feet. The imported plant and machinery were installed at site in December, 1998. The Company was under trial runs upto mid January 1992 and has commenced regular commercial production with effect from 20th January, 1992. The present project is for adding certain balancing equipments to reach optimum level of production with a better product mix and also to part finance the 8 satellite industries. The 8 satellite industries are proposed to be set up at Bombay, Calcutta, Madras, Delhi, Kanpur, Guwhati, Hyderabad and Ahmedabad. Each Satellite unit will be set up at a project cost of Rs.26.00 lacs along with private promoters." In page 10 of the prospectus, under the heading "Schedule of Implementation", the following is stated: "The company has already implemented the project for manufacture of pasta foods as mentioned hereinbefore. The Company was under trail runs till mid January 1992 and has commenced commercial production with effect from January 20, 1992. The company is marketing its products under the Brand name "SUFU". The company is in the process of finalizing the purchase orders for Balancing Equipments. The company has already completed the Process of setting up 3 satellite industries in Bombay, Madras and Guwahati and has placed orders for equipments for these units as available on No.9 in Material Contracts. These 3 satellite industries will start functioning from June 1992. The balance orders of Equipments for satellite industries to be situated at Calcutta, Delhi, Hyderabad, Ahmedabad and Kanpur are being finalized. These units will start functioning from September - October 1992 barring un-foreseen circumstances. The balancing equipments are proposed to arrive and installed at site by May 1992 and the Company shall go into production in full swing with better product mix by June-July 1992. By this time the 3 Satellite units will also start functioning and commence commercial production." In the prospectus, the address of the registered office of UVAL is given as Univitali, 341, B.J.B Nagar, Bhubaneswar - 751 014. Further, as per the physical verification report of the Bhubaneswar Stock Exchange, the address of the company is given as Plot No.62/63, Bhubaneswar - 751 003. Dr Krishnamurthy, Dr N K Rao, Dr V B Mitbander, Shri P P Bhatt, Shri Hariprakash Vyas and Col. K K Rao are shown as directors. Their qualifications and experience are also mentioned. Universal Vita Alimentare Limited - a vanishing company.
(3.) AFTER the said public issue, the shares of UVAL were listed at stock exchanges including its Regional Stock Exchange i.e., Bhubaneswar Stock Exchange. It has been found that UVAL has not been complying with various clauses of the Listing Agreement entered into by it with the Stock Exchanges viz., not submitting statutory reports, directors reports and other required reports, not furnishing financial results including Cash Flow Statements, Balance sheet and Profit & Loss Account etc. to the concerned Stock Exchange from 1993-94. The company also could not be contacted at its registered office by the Bhubaneswar Stock Exchange and as per the physical verification report of the exchange, the company "was not found at its Registered Office Address". The non-compliance of listing agreement by the said company is in violation of the provisions of section 21 of the Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as SCRA). UVAL was suspended from the Bhubaneswar Stock Exchange w.e.f. 10.3.97. This was communicated to SEBI by the Bhubaneswar Stock Exchange by its letter dated 16.8.2002. Show cause notice;