NEW DELHI: The government’s bid to clean up corporate India may spread panic in some boardrooms. The National Stock Exchange has asked about 200 companies listed on it to consider whether directors disqualified by the Ministry of Corporate Affairs (MCA) should continue on their boards.Most of these are small, often defunct, private companies but many of them share directors with some top firms. The digital signatures of these directors have been deactivated.“They cannot sign or upload any documents using that signature. The exercise has been linked to their unique director identification number,’’ a senior official said.Pawan Goenka of Mahindra and Mahindra , S Narayan of Apollo Tyres and Dabur , Vinod Kumar Dasari of Ashok Leyland , S Sridhar of DCB Bank and GV Krishna of Hindustan Petroleum Corp. are some of the directors caught unawares by the MCA action.Goenka, who has been barred as director of the Association of Indian Automobile Manufacturers, is on the board of several Mahindra group firms.He, like all other defaulting directors, cannot hold a board seat in any other company, according to the rules.Narayan, barred as director of GPI Textiles, is also on the boards of Apollo Tyres and Dabur. The companies have been asked by the NSE to place the matter before their respective boards.In an emailed response to ET’s queries, an Apollo Tyres spokesperson said, “Dr S Narayan is a reputed and long-time director on our board. There seems to be some anomaly in the list, which features his name, as he was not a director on the board of the mentioned organisation during the default period. Being a listed company, we have complied with all the governance procedures, as laid down by regulatory authorities.”There was no response to queries sent to Goenka, Dabur and Ashok Leyland. An NSE spokesperson confirmed that the exchange had sent out the letters.A top regulatory source aware of the matter told ET that there is ambiguity in the law. It was not possible to clearly say that someone should step down based on the regulation. However, the spirit of the rule seemed to be that a person ineligible for a particular board wouldn’t be eligible for a similar position elsewhere, the person said.“Any prudent and responsible board focused on governance would say that till your situation is resolved, please step down,” he said. According to sources, NSE’s missive followed a meeting with top Securities and Exchange Board of India officials.The move was triggered by the MCA disqualifying more than 300,000 directors of companies that have fallen behind in statutory filings. The Companies Act stipulates that firms will be struck off the registry of the Registrar of Companies and their directors disqualified if they fail to file annual returns and financial statements for three consecutive years. Publication of the list was intended to identify errant companies and directors.This is part of the government’s broad crackdown on black money and follows up on the note ban that was announced in November last year.“This exercise is part of demonetisation . No one had the guts to stop all this till now. It will prove a catalyst for the Indian economy,” PP Choudhary, minister of state for corporate affairs, had told ET in an interview on September 25. Choudhary said the companies had been served notice and given ample time for statutory filings.The minister, a lawyer himself, had clarified that Section 167 of the Companies Act disqualifies a director automatically from all other board positions once barred under Section 164.Meanwhile, the Madras High Court on Monday passed an interim order staying the Registrar of Companies (Chennai) order striking off the name of Bhagavan Das Dhananjaya Das as director of Birdies and Eagles Sports Technology. The court has asked the MCA to submit its reply within four weeks.ET spoke to practising company secretaries and chartered accountants with clients who have been disqualified to understand the gravity of the situation. None of them was willing to be quoted and all of them believe that the ministry’s action was a wrong interpretation of company law.One of them said his client discovered last week that his digital signature was not working.He found upon enquiry that he had been disqualified as a director in a family-owned company that was bogged down in a dispute between brothers.All the company secretaries ET spoke to believe due process and principles of natural justice have not been followed in the regulatory action.Directors were unaware that any action was pending against them as they had not received notices. A source in the corporate affairs ministry said it had deployed a software that culled out the names of companies that had defaulted on filings.Choudhary had told ET that the government could consider devising a rule to address the appeals of disqualified directors for whom the only recourse available is to approach the high courts. Companies can appeal to the National Company Law Tribunal.