``We've identified 275 such vanished companies out of 6200 listed companies,'' said BSE president J C Parekh. These companies apparently raised funds in the 1992-96 period when the public issue boom was in full force. The BSE chief admits that the exchange has no knowledge about the existence of these companies which were listed during the boom period. The BSE chief also admitted that over 1,500 companies have not submitted their accounts for the current year as per the listing norms.

Considering that each company (some of them were premium issues) had raised an average of Rs 5 crore from the capital market, the investing public has lost nearly Rs 1,375 crore in these 275 companies. However, market sources feel that theactual number of ``vanished'' companies will be not less than 500 on the BSE alone.

Exchange officials said these companies have not bothered to finalise the financial results and annual reports. There is no question of investors getting any dividend or other benefits from these ``vanished'' companies. The BSE is expected to submit the list of vanished companies to the Securities and Exchange Board of India (SEBI) shortly.

The exercise to trace the vanishing companies started after Prime Minister A B Vajpayee himself asked the regulatory body to track down such companies in a bid to revive investor confidence in the capital market. SEBI, thereafter, directed all stock exchanges to furnish details about the errant companies. SEBI had already sent a list of 39 vanished companies to the Department of Company Affairs for necessary action.

It is crystal clear that the promoters of 275 companies identified by the BSE have siphoned off the funds raised from the public. Put simply, these companies raised moneyto set up projects but there are no projects now. The companies, funds and promoters have vanished scene. ``When you allow fly-by-night operators to tap money, this will happen. SEBI can still track them down as they had filed prospectuses before launching their public issues,'' said a merchant banker, adding that these promoters should be punished for taking investors for a ride.

However, it may be recalled that merchant bankers -- including those owned by public sector banks and institutions -- themselves were responsible for introducing dud issues of shady promoters.

Merchant bankers failed in assessing the track record of promoters and viability of the projects. SEBI, on its part, was a silent spectator to this daylight robbery and bolted the stable door only after the horses had fled the regulator tightened the entry norms very late.

There is another story. Over 3,000 companies listed on the BSE are now quoting below the par value of Rs 10. Out of this, nearly 50 per cent -- i.e. 1,500 companies-- is traded below Rs five per share. The project status, fund utilisation and financial performance of these companies also reflect the sorry state of the capital market. If these companies had utilised the funds effectively, there is no reason that it should be quoting such low rates. There is no wonder that investors who put money in such companies are now keeping away from the capital markets.

Consider these figures. There were 1,350 initial public offerings (IPOs) in 1995-96. As per Prime Database, these are now down to a meagre 11 in the first seven months of the 1998-99. Considering the current state of the capital market, it is a classic example akin to killing a goose which laid golden eggs.