Local Circle for SEBI Related Grievances

I request to start a Local Circle Group, for grievances related to stock markets, dematerialization, and similar topics covered by SEBI, which seriously affect investments planned and made by average salaried middle class person.

Finally SEBI has taken a decision that all listed stocks need to be dematerialized on or before 31st Mar 2019, or else, they cannot be transferred (and hence cannot be sold). In addition, SEBI also has taken steps to dematerialize the unlisted stocks too.

Very Good. But what about the mess that SEBI had created earlier.

The dematerialization started around mid-nineties. However, majority of stock trading was still in physical form, due to which, an investor was getting delivery of stocks in physical form and also in tradable lots (which had mostly 50 or 100 shares per lot, for that company). Most of the salaried middle class persons could buy one or two lots of stocks, and then forget about it, to keep it as an investment to be used at a later date, when one gets retired.

Mobile phones and emails had also arrived, but SEBI had not taken any cognizance of them. As late as 2004-05 or around that time, the investor was not required to be given any specific proof. Neither the details like PAN, Mobile number, address proof, bank account details were ever asked, nor any such proof was ever submitted. For change of address, an application on plain paper, sent to the company through ordinary postal mail, was valid.

And yet…. There was no chaos. Everything worked without any problem, except the large scale scams , which had nothing to do with average salaried middle class man (but always considered as the bench mark by SEBI persons).

For some reason, IEPF (Investor Education & Protection Fund) was formed in 1999 by making amendments to the Companies Act 1956.

IEPF has neither Protected nor Educated the investors. It only has punished the legitimate shareholders.

IEPF formation has denied the legitimate shareholders the unpaid dividend claimed by them (as there was no check by SEBI, on the listed companies, who continued giving false information under mandatory submissions). Such companies cared a damn for small investors, and that is exactly what SEBI too did.

I have some questions to start with :

1. If the legitimate shareholder keeps claiming the dividend and companies do NOT pay it, how and why the Claimed UnPaid dividend is termed by SEBI as UnClaimed Dividend? Has SEBI ever carried out an audit to check about the claims from the shareholders, which were denied by various companies, even if the shareholder had submitted to the companies the details of Bank account (in which dividend was deposited and credited for earlier years), & PAN number.
2. If there are stocks in physical form in the maiden name of a woman, and the certificate is lost after she is married (before she could get it dematerialized), what is the correct procedure to be followed, is not clear to SEBI, and hence not specified by SEBI. Ideally, the name change should get effected first and then to tackle the case of lost certificate, because legally, after getting married, the woman’s name has now changed. But NO. The two points are kept mixed to allow the companies to delay the matter, so that even the new share certificates after the split could be sent to IEPF. (Unless some ‘adjustment’ is made with company employees)
3. Most of the persons, who were investing in stock markets about 25 years ago, (as it was the only convenient mode of investment for a common salaried middle class person), they all must have become senior citizens now. Some of them might have developed health issues too. But SEBI would refuse to understand any of it.

Now that there shall almost be no stocks available in physical form, there shall be no further transfer of either Dividends or Stocks to IEPF.

What action SEBI plans to have, to audit all the credits received by IEPF so far, and check for the claims that the legitimate shareholders had been submitting for claiming the same, but the adamant attitude of the companies and/or their RTA (Registrar & Transfer Agent), supported by SEBI, had denied them their legally owned investment/dividend.

By forming this group on Local Circle, I expect members to give details of the dividend &/or stocks lost to IEPF due to SEBI’s difficult to understand policies towards small investors.

Hopefully, SEBI may start looking into the matter, and (hopefully) some shareholders may find themselves to be lucky in getting the lost dividends and/or stocks that were transferred to IEPF.

However, if SEBI insists in additional paper work to harass the senior citizen shareholder (by stressing to approach IEPF which shall have no input funds wef 1st Apr 2019), well then one can only confirm that SEBI has managed to collect the unpaid dividends and stocks, for some ulterior motive.

If you are an affected stock holder, and would like to join the circle if formed, mark this message as helpful. If 20 or more people are interested, then such Local Circle Group can definitely be formed. more  

View all 15 comments Below 15 comments
Mr. Mangesh Anaokar ji, many many thanks for such a wonderful articulation of a topic of crucial interest to consumer-investor. Well not talking of the existing corruption or bribery in SEBI and the equity market, you have well said and invited comments on "But what about the mess that SEBI had created earlier." May I help you a bit:

1) My answer to your first point is: It is a deliberate design of crowding of unclaimed and un-refunded dividend and when pile up to a few hundreds of crores, the political leadership diverts this money - On 09.11.2006, the economic analyst Sucheta Dalal gave a short article on a fraud in “Sebi’s Investor Fund” in the Indian Express as to how the Investor Education & Protection Fund (IEPF) worth of Rs.385 crores was transferred to Consolidated Fund of India without any rules or regulations. IEPF is a very big fraud on consumer-investors the representatives of whom in the Consumer Protection Councils under the Consumer Protection Act 1986 under the Union Ministry of Consumer Affairs are not consulted by the SEBI or the Ministry of Finance. Will the SEBI will come out with the truth? I have filed a Writ Petition in Delhi High Court for finding a remedy to get this personal money of consumer-investors to the CWF. Hope for the best from the judiciary.

2) My answer to your point Nr 2 is also the same: SEBI does the crowding of unclaimed dividend just in order to allow the political leadership to divert the money to funds like Consolidated Fund of India or The Finance Act 2016. The IEPF is the front office of SEBI to show the investors that it is a benevolent service to educate and alert the retail investors. The soonest it is closed down the better it is, and save the unclaimed dividend from getting diverted to IEPF.

I have lot more to write and will do in instalments as am very much short of time. However, for your any enquiry I am available on email ID: gcmbinty@yahoo.com, and Mobile: 9910338312. more  
Another problem faced is non-availability of transfer forms in case of certificates held in physical from. I live in Rewari Haryana where no such forms are available. I have visited some companies in Delhi also but without success. This is required as some shares held in physical from in the name of my daughter, who has since got marrird, ave to be transferred to my name. Can anybody advise as to how to go about it more  
You can download the new securities transfer from the internet by doing a Google search for “securities transfer form SH4 download” which will allow you to download the form in PDF format.
You need to fill the required fields (for which you could take help of your broker), then get the stamp duty affixed by getting it “Franked” after making the payment of the same. Franking facilities are usually available in the Sub Registrar’s office where land and apartment registration takes place.

In addition, self attested copies of PAN cards of all the holders, address proofs (preferably self attested Aadhar card for everyone, and your signature attested by your bank, specifying the account number is also required.

Then the duly filled SH4 form along with the physical share certificate can be sent through Speed Post to the company (or Company’s Registrar & Transfer Agents). They usually take a month long time.

Good Luck. more  
I have many Physical shares.My DP says these are in CDSL which we do not have. What should I do?
Further I have many physical shares whose name might have changed or they are not in trade list. What should I do for these.
Please suggest by mail at bkej@rediffmail.com more  
Physical shares can never be in CDSL. NSDL and CDSL are the two organizations, which act as ‘Bankers’ for safe keeping the stocks in Demat form.

Better that you get a Demat account opened with a proper stock broker (and NOT any bank also offering this facility). The broker could guide you and solve your problems. Do NOT delay any more. more  
How will i know whether my stock has been dematerialised or not.is there a website in bse which gives all the details of the stocks which are in demat mode so that the physical form I can submit to get it done for demat
Very good initiative more  
Every service provider, through whom one takes the demat account, also has form for dematerialisation. You need to fill that form and submit it along with paper certificate of the shares held. The service provider gets it dematerialised into your demat account. ONLY conditionis that, the names on the paper certificate and demat should be same and in the same order. If not, you need to urgently open a separate demat account with the names as per the paper certificate, and then get it dematerialised.

You will not be able to transfer/sell shares in forrm of physical certificates from 1st Apr 2019. more  
I am also facing a problem of fake entry in share holders record of a company as the physical certificate is with me but name of other person is on record of company SEBI closed my complaint to favour Karvy who have s still not able to resolve the dematerialisation request more  
Read my reply to Mr Ashok more  
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