Context:
The government’s decision to publicize the identities of entities involved in malpractices through shell companies.
What are the reasons behind the government’s crackdown on shell companies?
- Fight against black money
- Create an atmosphere of confidence
- Improving the climate for ease of doing business
What is the government’s latest decision on shell companies?
- The government will publish the details of individuals associated with shell companies and doing malpractices.
Why should the government be cautious?
- A Hasty decision may fulfill the cause of the move; an Innocent entity may be penalized. Example: the Securities Appellate Tribunal recently gave relief to some entities over trading curbs hastily imposed on them by SEBI.
What are the areas of opportunity?
- Each shell company must be duly investigated
- Both the Union government and the regulatory arms should analyze the loop-holes which allowed so many companies to do malpractices
- They should target the deep-rooted maladies instead of symptoms
- It should make earlier to delist a company
