Sucheta Dalal :Digital derailments of e-gov initiative
Sucheta Dalal

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Digital derailments of e-gov initiative  

Jul 11, 2005



 

All 22 offices of the Registrar of Companies (RoC) have turned extremely busy these days. And if they haven’t they should better be. Otherwise, the Rs 341 crore mega e-governance project of the Ministry of Company Affairs (MCA) of digitising corporate filings by a massive 650,000 companies may come a cropper.

 

The problem is not with the project mandate, which has gone to Tata Consultancy Services (TCS), a respected name. It is with the raw data that the MCA provides TCS.

 

Anyone who has ever registered a company knows how flawed the process is. But glitches over arbitrary name rejection or registration of similar names/generic names are still procedural issues. The problem with data cleaning for digitisation is far more complex. In February 2005, TCS was mandated to design a portal that will automate 85 per cent of company-related transactions ranging from company registration to delisting. The aim is to create an easy e-filing system for business and industry; but it involves eliminating around six crore sheets of paper routinely submitted by over 6.5 lakh companies at the rate of 50 pages each. The MCA will open 55 new offices across India just to explain the project to users across the country, with two pilot projects scheduled to kick-off this December.

 

Last week, the RoCs received an urgent letter from the MCA recognising potential problems. The letter listed a series of glitches in company information currently posted on the MCA website. RoC sources tell me that the warning is based on an audit by Prithvi Haldea of Prime Database, a leader in the business of database maintenance. Here are some of the stunning findings that were communicated to RoCs across the country.

 

First, how do companies with a foreign suffix like AG or Inc., PTE and LLC get on to a MCA database? Surely they are not registered by the RoC? There are over 15 names such as Info USA Inc, Liebherr-Service AG, Duravit AG, DHV Consultants B.V., Transocean Discoveries LLC or RioTinto Diamonds N.V. One company was apparently allowed the utter simplicity of being registered only by the letter ‘A’.

 

Another problem is bad registration protocol, a nightmare for electronic databases. For instance, hundreds of companies have inverted commas as a prefix; sometimes the commas enclose just one or more words in the company name. ‘‘Art Factory’’ India Pvt Ltd, or ‘‘Bombay Blues’’ Restaurants Pvt Ltd, are examples. Scores of companies have a ‘’ preceding their names and several hundred companies have names preceded by a numeric character (e.g. a company called 1-800 Online Pvt. Ltd). Both sets of companies are unsearchable, as are those whose names that begin with ‘The’.

 

Typing errors and spellings are another problem. Hundreds of companies which were delisted under the Simplified Exit Route remain alive on the website. Companies such as A-1 Carbon Solutions Pvt Ltd, are listed twice for no reason. More surprising are the missing names. For instance, Shonkh Technologies is simply not on the database.

 

A more recurrent problem is that the exact same name has been given to two different companies by different RoCs. In some cases, the duplication may have occurred because one of the names is spelt wrongly. Now look at these two names. Anand Fachon Apparel Designers Pvt Ltd, with the registration number 08-15401 and Anand Fashion Apparel Designers Pvt Ltd, with the number 08-15883. Are these two different companies? It is probably safe to bet they are the same, but unless the RoC digs out original filings, it is impossible to tell. Another example is Hindustan Vacuum Glass. There are two companies with the identical name but different registration numbers. The only discernable difference between the two names is that one has a full-stop after Ltd. Majestic Overseas Pvt Ltd, has a near twin registered with the RoC, the second one has a little deformity in the word Overseas, with the ‘s’ and private having gone missing. Identical names registered in different states, or cases where a space between two characters has been read as different names by a computer are also in evidence.

 

Scores of Haryana-based companies which have had court orders passed against them are simply not on the database. Were they deliberately kept out? The MCA website is completely clueless on companies that have changed their names. Presumably the website should show only current names, but in many cases, Prime has discovered both old and new names being listed with different CINs. TCS would record both, unless these are checked and clarified.

 

Liquidated companies create a piquant situation. Clearly, records of such companies must exist with the regulator, but apparently they have not been archived since October 2004. Even name changes have not been updated since October last year. Ideally, this ought to be part of a master list. The data on corporate filings is ridiculous. For instance, companies that have filed returns are shown as defaulters.

 

An especially dubious finding is that companies with identical names are registered at different RoCs. Surely, this cannot be an oversight by those who take the trouble to register a company. Is this then a ruse to split the business or fudge accounts? There are some fairly well known names in this list.

 

Another example of callous negligence, probably going back over decades is the gross mis-spelling of names. Some of these wrong spellings are also to be found on the RoCs data on court orders.

 

Tanmoy Chakrabarty, vice-president and head, Global Government Industry Group at TCS say, ‘‘We will go by the material that is placed before us.’’ And correctly so. After all, a private contractor cannot dare to change any information that is filed with a government agency. Chakrabarty says, one check that the e-governance system offers is that it will set off an alarm when duplicate data is sought to be filed. It will then seek a clarification from the MCA.

 

What the RoCs need to do is to proof-check the original application of each company, with the data that is planned to be handed over to TCS. Although this may seem like a huge job, experts at database maintenance say when the burden of 650,000 companies is split between 23 RoCs, the task is fairly manageable and can be completed in a fortnight. But it must be done, before the messy records get digitised and turned into a more embarrassing, longer-term problem.

 

http://iecolumnists.expressindia.com/full_column.php?content_id=74205

 


-- Sucheta Dalal



 



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