As per a leading news daily, a new provision mandating the dematerialization of shares of unlisted companies is in the offing. This is aimed to curb any future frauds and also take the veil off the corporate and targeted at any benami entities.
The drive shall be at first commenced with 80,000- 90,000 public companies and also those having holdings over 10% in a company will be classified as significant beneficial ownership" with mandatory disclosures.
The announcement by the MCA will be made over the next few weeks such that real ownership or holding in a company can be easily made known and also the shareholders. The current ruling requires only listed entities to dematerialize shares. And there are over 11 lakh active companies as on March 2017, and they are not mandated to dematerialize shares.
At the behest of Parisbased Financial Action Task Force, the new section was incorporated in the Companies Act to fight against instances of money laundering activities. And currently the Ministry of Corporate Affairs is in the process of providing for rules to make tracking real beneficiary in a company easy as many a times benami holders are found in case of shell companies.
The news daily cites a sources as saying, "There are cases where the real owner is someone else as the shares have been paid for through funding to another person. Similarly, I may be holding shares but I can have a back-to-back arrangement on voting. With the new rules, all these issues will be sorted out".