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Public Interest Exclusive
Wiped out by Motilal Oswal, shunned by a callous SEBI & ministry, the 78-year old's fight continues

Instead of going into the complaint of Wing Commander (retd) CR Mohan Raj, about a forged power of attorney, the finance ministry just forwarded a mindless reply it received from SEBI to Rajya Sabha MP Rajeev Chandrasekhar

About nine months back Moneylife wrote an article about the harrowing tale of a 78-year old veteran from the Air Force, whose life savings was wiped out at Motilal Oswal Securities by using a forged power of attorney (PoA).
 

 Motilal Oswal, which preaches “highest ethical practices”, stuck to its stand of blaming its customer and keeping completely mum on the allegation that it had forged the PoA.
 

Rajeev Chandrasekhar, a member of Rajya Sabha, who is also a member of the Standing Committee on Finance, took up retired Wing Commander (Wg Cdr) Raj's complaint with the ministry of finance (MoF). The reaction from the government is a shocker. Mr Chandrashekar has received a letter from Namo Narain Meena, minister of state, MOF, asking Mr Raj “to follow the procedure laid down by SEBI for redressal of his grievances”!
 



In effect, both the regulator and the MoF are happy to wash their hands off this investor’s grievance and to push them into tedious and unfair arbitration (especially for an ill, senior citizen) without exceptions or application of mind. Is it any wonder that millions of investors have exited the capital market and prefer to invest in gold? But let’s return to this war that Wg Cdr Raj is fighting at the fag end of his life. 
 

The Securities and Exchange Board of India (SEBI), to whom Wg Cdr Raj has sent innumerable letters and reminders, knows for a fact that he has a ruling from a District Consumer Redressal Forum against MOSL regarding the forged Power of Attorney (PoA). The Forum asked him to take up the issue of getting his money back at the appropriate capital market platform. It is this that Motilal Oswal Securities is holding on to, knowing fully well that the 78-year old man will find it difficult to go through another battle. Shockingly, the MoF has chosen to behave like a post office, even when an MP and standing committee member has raised this sordid issue. This disregard for elected representatives, especially those who are not a part of the ruling government, is a hallmark of the past nine years under the United Progressive Alliance (UPA) government. Moneylife has written in the past about how letters from retired Union Secretaries like EAS Sarma, specifically addressed to SEBI chairman UK Sinha, were dumped into the automated redressal system called SCORES leading to a similarly mindless response to him.
 

 In this case too, SEBI, which is mandated by law to protect investors, made no attempt to contact Wg Cdr Raj again, but simply accepted the submissions made by Central Depository Services (CDSL) and Motilal Oswal Securities, without even looking at the correspondence exchanged between the 78-year old and the market regulator. The Air Force veteran had been sending numbered reminders to SEBI, such as “POA forged or not- matter pending with SEBI since 7th July 11-Reminder 18”.
 

The minister’s letter claims that Sushmita Sethi, assistant manager at the market intermediaries regulation and supervision department -IV at SEBI had responded to Wg Cdr Raj asking him to follow the procedure prescribed for redressal of grievances.
 

 Wg Cdr Raj, who can barely speak because his larynx had to be removed due to cancer, terms this reply from SEBI as false. In an email, he said, “What is the advice she gave on forged PoAs, which is my grievance? I have been addressing her in repeated mails for nearly two years to redress my grievance about sale by forged PoAs. She is making no mention of forged PoAs and is avoiding this main issue to protect the broker. And yet she claims she advised me.”
 

 As mentioned by Wg Cdr Raj in the Moneylife article earlier, despite having a court judgement stating the PoA was forged, SEBI chose to consider the reply of CDSL in which they were provided an entirely different PoA given to them by MOSL.
 

Neither CDSL nor SEBI found it odd and weird that anyone would sign two PoAs on the same day for the same purpose. Clearly, SEBI is hell-bent on protecting the broker Motilal Oswal. The question is, why?
 

Turnover of Rs200 crore?

But that is not all. While ignoring Wg Cdr Raj's claim, SEBI is bending over backwards for Motilal Oswal Securities in other aspects too. Suddenly, the MoF letter mentions that the 78-year old ran up a turnover of a whopping Rs200 crore with the broker and that he had accepted this fact in an email to the brokerage. The email is not attached in the correspondence.
 

Strangely, even Motilal Oswal, chairman of MOSL never mentioned this figure of trading turnover in his conversations with Moneylife. In fact, Mr Oswal had sent a team to Bengaluru to talk to Wg Cdr Raj, but the official walked away when he made it clear that the Air Force veteran intended to record the conversation. In a dispute of this size, where the investor is unable to speak, this simple precaution for his protection apparently frightened off the brokerage. But SEBI and the MoF are uninterested in these facts. Indeed, insisting on the recording looked prudent with hindsight since Motilal Oswal Securities seems to be coming out with new ‘facts’.
 

According to the letter from the minister, Motilal Oswal Securities has apparently claimed to SEBI that Wg Cdr Raj admitted to running up this turnover. The investor says this is the first time that he has even heard about this amount. He does not recollect sending an email to MOSL, acknowledging the same and the broker has neither mentioned this quantum in the three trials in consumer courts nor in any of their correspondence. Wg Cdr Raj also says that he had never applied for a margin account through which all the transaction took place.
 

He said, “I never opened any margin account with MOSL. I only opened a demat (DP) account. All the stocks sold off by MOSL were only from this DP account and not from any margin account as she (Ms Sethi) claims.”
 

Clearly, Motilal Oswal is hiding behind the facts and spinning new ones and SEBI and ministry of finance cannot be bothered about it. Precisely, anticipating this kind of dubious action and behaviour from the brokerage, Moneylife had specifically advised Wg Cdr Raj to record the conversation when Mr Oswal, personally sent some people to Bengaluru to speak with the 78-year old. Our sense was that since he cannot speak and there would be the danger of attributing consent to issues when he has not said or meant it during the meeting, especially when we are dealing with a company that was alleged to have forged a PoA.

 

Gross misuse of PoA by brokerages was a common problem during the last bull market. At Moneylife, we have reported many such cases since 2006 and SEBI finally decided to address the PoA problem in 2009-10. What SEBI could not care less is that the grievance redressal mechanism is so poor and fraught with delays that the investor gets harassed even more in the bargain. The brokers get away scot free or with a minor punishment, and it is not long before they get back to their malpractices. This is one of the main reasons why the investor population is dwindling. Probably, Wg Cdr Raj, a war veteran, sees the world differently. He has decided to fight. Now if only SEBI and MoF were a little unbiased and proactive about this case, rather than batting for a dubious broker, he would have won this battle too by now.

 

Additional Reporting by Yogesh Sapkale and Jason Monteiro

 

You may also want to read:

 

Wiped out by Motilal Oswal, an aggrieved small investor won in consumer court but got shafted by SEBI

 

Motilal Oswal MOSt Prime Equity: Nothing new to offer

 

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COMMENTS

sanjay

4 years ago

Hello, can anybody inform me about penalty prescribed by NSE / SEBI to broker per day for delay in release of security pay out and funds pay out .

DJ

4 years ago

I get a feeling you are asking a wrong question. Any ordinary person would have got the same answer from SEBI. Not too sure why should a MP get a better answer.

The problem lies because MPs get a better answer and they leverage it to get things in their favour and tomorrow we complain there is corruption.

Right question should be why is SEBI so callous?

Naresh

4 years ago

Friends,

This is a live example of how India's Rule of Law is simply NON EXISTANT!

If you have any amount that is above Rs. 5 lakhs that you want to invest, feel free to use the RBI's liberalised remittance scheme to park your capital out of this lawless country. The best bet is Singapore and Switzerland which have strict law enforcement systems and your investor rights are protected.

Not to mention the depth and breadth of financial products available.

Switzerland initially had high account minimums but now are reduced to as low as 0 in certain banks which are purely online banks. Plus you can open an account from your home by just sending in a certified passport copy.

A test email to FINMA, their regulator (like SEBI) got me a response within 24 hours! They are quick, efficient, and it is easy within Indian laws to keep money offshore.

Please do not open margin accounts as it is not allowed in the RBI rules. You can open personal accounts and park your money in any currency as you see fit.

Within India, you just open term deposits with commercial banks and also can buy and hold shares . Use a public sector bank demat account and always use depository slips to deal with the broker.

Hope this info helps. Get your capital out of India.

venkat

4 years ago

Can anyone say , where is the end to it> is all this happens only in our country r somewhere else too????

Vinay Joshi

4 years ago

Ms.Sucheta, Mr. Yogesh Sakpal & Jason Monteiro,

Can't your Mr.Nagesh Kini, FCA; DO ANYTHING ON THIS? As a matter of fact it should have been settled before being put, with his INTERVENTION! Amazing to me!

Regards,

REPLY

nagesh kini

In Reply to Vinay Joshi 4 years ago

Mr. Joshi who claims to have "tamed" many entities can jolly well suo moto undertake in helping the Wg. Com.
I don't need instructions from anyone, least of all Mr. Joshi, to move in the matter.

sanjay

In Reply to nagesh kini 4 years ago

hello mr nagesh / mr joshi , can we please know about you and your introductions . there is a verbal war going out here between the two of you !

Vinay Joshi

4 years ago

Ms.Sucheta, Mr. Yogesh Sakpal & Jason Monteiro,

Can't your Mr.Nagesh Kini, FCA; DO ANYTHING ON THIS? As a matter of fact it should have been settled before being put, with his INTERVENTION! Amazing to me!

Regards,

Naresh

4 years ago

This is totally unacceptable!

I think it is a deliberate target. A 78 year old man has been targeted because he is at the fag end of his life.

Do not mistaken. It is a deliberate attempt by them to make a quick ill gotten gain. PULL YOUR CAPITAL OUT OF THIS BROKER!

sanjay

4 years ago

it is the joke of the decade !! None of the brokerages are having their head above water .

pawan agrawal

4 years ago

in fact, nse , bse , cdsl, nsdl and sebi all are violating rules and regulation of securities laws
smc global securities ltd has filed thousands of false cases against investors in the court of delhi just to cheat and grab the money of poor investors but sebi is not taking any action this fraud broker
smc global securities ltd has made forged power of attorney of my mother who is 70 year old
the whole nation is being cheated these fraud brokers and investors are helpless

REPLY

Dayananda Kamath k

In Reply to pawan agrawal 4 years ago

because of their bad service i asked them to close my account and refund lying with them but never replied nor sent me the amount. it is a small amount after some time i agains wrote to them but they said they have sent the amount by cheque. i did not receive their cheque. then i asked them whether the cheque issued by them has been encashed. agaiand there is no reply nor they send me the amount. so even if you close the account you are not sure you will receive your money back from them.sebi is supporting such big brokerages to the hilt.by non action or treating the complaint based on vague replies given by the brokerages. there more than 10 complaints with sebi filed by me without any logical conclusion.

sanjay

In Reply to pawan agrawal 4 years ago

@ pawan agrawal : I am surprised to see you mentioning about smc global sec . filing cases against investors . can you please share details .

ramanathan dwarakanathan

4 years ago

Pl don't mind.I am surprised and taken a back after reading this. mosl is a non controversial and an ethical company. they're not the one who would indulge in such acts. I wld urge the investor or his rep to meet the chairman Mr. MO to get this addressed.

REPLY

uttamkumar dubey

In Reply to ramanathan dwarakanathan 4 years ago

Dear Sir,

Ramayana is over , and you are asking who is sita.
Be alert.
not meant to offend in person.but they are equally responsible for the deplorable state of the nation.They have duped the nation mixing with Subhash sharma from resurgere mines and have duped lacs of investors.

rgds,
uttam

Suiketu Shah

In Reply to ramanathan dwarakanathan 4 years ago

Sure this must be the joke of the day "mosl is an ethical company"!

sanjay

4 years ago

Hello moneylife ,

big brokerages and their employees frequently resort to rampant Unauthorised trading to increase their revenues by way of broking - in the way destroying the investor money . This should be taken up in way of a PIL .. I want to help and aid Moneylife in this , so kindly inform me how and in what way I can participate .

Bhaswati

4 years ago

So can moneylife initiate a PIL against Motilal Oswal?

shivkumar

4 years ago

Why are we surprised at the treatment being meted out to a retired services officer. This is nothing new. Unfortunately, things have been going from bad to worse.

Politicians in power are no longer interested in serving the public, they serve only themselves and their money bag masters.

So far as Public Servants are concerned, they want public to be their servant.

This is the sad reality.

RAMESH VASWANI

4 years ago

If this is the fate of MP taking up the case of War Veteran, we do not know what will be the fate of aam adami ?

REPLY

Suiketu Shah

In Reply to RAMESH VASWANI 4 years ago

Perfectly said and well emphasised on the gravity of the crime.An eye for an eye wl only end up making the fraud wealth management companies blind,nothing else when their name wl come in the breaking news that their top WManagement executive has been beaten up in open public by cheated investors.It is then that the whole of Indian wl wake up to these criminals.

uttamkumar dubey

4 years ago

Dear Moneylife,

With such an apathy, why do u invite ppl from SEBI/RBI and such stupid places and honor them with your platform.

Just boycott them.

Another mystery of motilal can be exposed by catching Subhash sharma from resurgere mines and minerals.
Both of them have duped the nation and sebi as usual had been dumb and deaf in terms of action.
rgds
uttam

Gridlock at the power centre?
Once the Smartgrid plan is implemented by Power Grid Corporation, it expects to prevent tripping and help in smooth flow of power. But, as a sequel to setting up the Smartgrid, state electricity distribution companies will have to upgrade their inter-state checking transmission systems
 
According to Power Secretary, P Uma Shankar, the southern region, which is not connected to the National Power Grid will face an estimated 26% deficit during this fiscal.
 
Power Grid Corporation of India (PGCIL) has sought the permission of the Central Electricity Regulatory Commission (CERC) to upgrade its stations to enable them to implement the Smartgrid mechanism.  This is estimated to cost Rs655 crore and may be completed in three years after receiving the approval. Naturally, this is likely to be accomplished in several phases as work progresses. Why did not think of this earlier, is another question.
 
There are five grids in operation, viz, Northern, Eastern, Western, North-Eastern and Southern.  Apart from the Southern grid, all other grids are interconnected.  This year, apart from Southern, North-Eastern grid is likely to face a shortfall of 10% while the Northern region may be hit by a negligible shortfall of 1.3%.  However, should there be a fall in power production itself, for any reason, these estimates will go haywire.
 
All these figures will change, should the government decide to come to the rescue of Pakistan and supply it the much-needed power in that country, to show our sincere feelings to establish our continued brotherly relations with our neighbour.
 
Anyway, because of the transmission constraints, there is a restriction in the flow of power particularly between the North Eastern and Southern regional grids. However, as stated earlier, this is likely to improve by next year, as per the power secretary’s statement.
 
Once the Smartgrid plan is implemented by PGCIL, for which it has sought the assistance of Indian Institute of Technology in Mumbai, it expects to prevent tripping and help in smooth flow.
 
But, as a sequel to setting up the Smartgrid, Discoms (state electricity distribution companies) will have to upgrade their inter-state checking transmission systems involving expenses, but this will reduce power outages and thefts.  Also, once the “smart meters” are installed, households can programme their electricity use and consumption is likely to come down by 20-30 units for each consumer, thus reducing the monthly bills.
 
It is hoped that CERC (Central Electricity Regulatory Commission) would whole-heartedly support and approve this move by PowerGrid, but what is lamentable is the need to seek permission to introduce such beneficial programmes to the consumer.  Public need to be served.
 
PowerGrid, and others like it, which can bring such benefits to people at large, need to be able to act independently to take such steps, without waiting for approvals!  After all, why did PowerGrid not think of this earlier? It must take immediate steps to reduce the time frame for this project from three to two years, if not less, while it awaits the approval from the CERC, which is likely to take some 30 days to give its decision!
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
 

User

EPFO wants to settle PF claims in three days
EPFO is also introducing a facility where claimants would be able to apply online for transfer and withdrawal of their PF from 1st July
 
Employees’ Provident Fund Organisation (EPFO) is planning to claims like transfer and withdrawal of provident fund within three days. The move from the retirement fund body will benefit over one crore such claimants every year.
 
EPFO, in order to give effect to the proposal of expeditious settlement of claims has called a meeting of all zonal heads on 5th July.
 
Quick settlement of claims, EPFO said in an officer order, “was necessary to improve the image of the organisation.”
 
The body is expecting 1.2 crore claims in the current fiscal and hopes that if around 70% of those are settled in three days, then about 84 lakh claimants would be benefited.
 
EPFO has already launched a pendency clearance drive to settle all claims received before 15th June this year. As many as 5.38 lakh claims were pending as on 11 June 2013.
 
“ ...in 2012-13, the body has settled 1.08 crore claims, out of which 12.62 lakh claimants were dissatisfied as their claims were not settled within 30 days. Moreover 1.41 lakh claims not settled even after 90 days has brought down the image of the EPFO amongst our members,” the order stated.
 
It further said, “...customers expect change in the mindset from 30 days (maximum period for settlement of claims) to at least three days in computerised era for withdrawing their own money.”
 
EPFO is setting up a central clearance house which will be operational on July 1. This will enable subscribers to apply online for settlement of withdrawal and transfer of funds claims.
 

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