Rather than the fraudulent accounting revealed in the WorldCom scandal, or the auditing failures uncovered at Enron, Indian investors have been hoodwinked by firms which have simply run off with shareholders' cash, authorities believe.
The Securities and Exchange Board of India (SEBI), the country's financial watchdog, is to open investigations into firms which, after stock market flotations, have simply vanished.
"At least 229 companies which collected funds through public issues are no longer available at their registered offices," the board said.
'Lock, stock and barrel'
Not that foul play is suspected in all cases.
Some 64 of the "vanishing companies" have at least been filing annual returns.
Prosecutions have been launched against 135 companies, if they can be found.
"Some promoters raise capital from the market and, when business slumps, they take the easy way out by simply shutting shop and disappearing lock, stock and barrel," a board official said.
"But we will do our best to track down the absconding promoters and restore investor confidence."
Delhi tops table
The mystery company revelation came as the SEBI revealed that more than 15,600 firms were registered in India between April and December last year.
Delhi attracted the greatest number of registrations, with the west Indian state of Maharashtra in second place.
Seventy two foreign firms set up shop in India, taking the total foreign complement to 1,213.
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