The regulator had earlier issued show-cause notices to promoters/directors associated with such companies. ``Those directors who failed to respond were deemed to have no explanation to offer and accordingly Sebi today issued an order debarring 70 directors from associating with the capital market for a period of 5 years,'' Sebi said. Some of the show-cause notices were returned undelivered and some directors responded.

It has also named 80 companies which vanished after raising money from the public. After intense investigations, SEBI and stock exchanges had found that these companies have no registered offices and projects. The SEBI order, which comes into effect 30 days from now, prohibits these directors from raising resources from the capital market, in dealing in securities in any manner andrestricts their association with any capital market intermediary.

As recommended by the task forces set up by the SEBI, action against the delinquent companies like inspection under Section 209A of the Companies Act, 1956 and prosecutions for non submission of necessary returns was considered by the Department of Company Affairs, Sebi said.

Sebi has set up task forces to initiate action against the 80 `vanishing companies' identified by it. Seven regional task forces comprising officials of Department of Company Affairs (DCA), Sebi and the regional Registrar of Companies (RoC) and stock exchanges have been constituted to initiate actions against such companies under various laws.

According to the SEBI, inspection process has been initiated against 25 companies and the process of initiating such an action is in an advanced staged against 12 companies. Prosecution has been launched in respect of 43 companies by the DCA and RoC have also informed the police about cases where cheating was suspected, theSEBI said.

In case any of the directors against whom action initiated makes a representation within 15 days from the date of the order, the same would considered by SEBI. The directives have been issued under Section 11/Section11 13 of the Sebi Act with a view to protect the interest of investors in the securities market.

Apart from these actions, the stock exchanges are also initiating various other actions like filing of winding up petitions, prosecution for non-compliance with the listing requirements and transferring the trading of such companies to a separate category.