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Ministry of Corporate Affairs (MCA) to Deregister 400 Chinese Companies
The Ministry of Corporate Affairs (MCA) is set to remove up to 400 Chinese companies operating across 17 states within the next three months, according to a report by Moneycontrol citing an unnamed government official. Additionally, more than 700 Chinese companies are currently under MCA investigation. The inquiries into nearly 600 of these companies have concluded, with 300 to 400 facing imminent deregistration. These entities include loan apps and online job companies.
The MCA’s investigation focuses on digital lending apps engaging in predatory lending, fraud, or other financial regulation violations. There is growing concern in India over the use of such apps, especially those linked to Chinese corporations. Allegations include aggressive debt collection tactics, exorbitant interest rates, and unethical practices like harassment.
The targeted companies will be officially deregistered by the Registrar of Companies (RoC), rendering them legally invalid as businesses. The official stated that many of these companies are either untraceable at their registered addresses or have shifted to different business activities despite receiving initial investments. Some companies involve financial and incorporation-related fraud, with instances of Indian directors managing accounts operated from China and others showing no transactional activity.
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Under Section 248 of the Companies Act, these companies will receive a notice to respond within a specified timeframe. A second notice follows a month later if there’s no response, leading to the companies’ removal from the registry.
The 300–400 firms likely to be struck off are spread across states, including Delhi, Bengaluru, Uttar Pradesh, Andhra Pradesh, Mumbai, and Chennai.
In a related development, the MCA is further investigating 30 to 40 additional Chinese companies, including manufacturers of mobile components like batteries and screens. Action will be taken based on the findings of these inquiries to ensure transparency and accountability in dealings with Chinese firms in the technology, infrastructure, and finance sectors.