Blue blooded crooks of Dalal Street and NCDs or khokas

Be aware, companies are once again raising money through unsecured NCDs and they are being hawked by well-known market intermediaries. At a time when the government and its regulators are doing their best to lure investors into the capital market, it makes good sense to look in the rear-view mirror

 
Industry is the modern temple of India, Jawaharlal Nehru used to say. But when these temples turn into rogue durbars, is a matter of time and faith? This story is about shattering of that faith and should work as a lesson.  Recent non-convertible debenture (NCD) issues of India Infoline, Muthoot Finance, Shriram City and others to collect Rs2,150 crore in unsecured debentures in September alone, has made me to write these few paragraphs.
  
The biggest losers of the declining share market are the corporate houses.  Not only their market capitalization or net worth reduces, their cheating ability also gets greatly hampered. A booming market creates exuberance, lifts sentiments and attracts hoards of people out of which some can be easily fooled.  In bad markets, they cannot find enough investors to sell their dream projects at exorbitant premiums nor can they raise debt in equity linked schemes or at low interest rates.   
 
Over two decades ago, industrialists, past and present, had created a sort of fashion of raising money through secured debentures, equity linked or partly convertible.  The money was being collected as if they don’t have to return, almost like now. Securities and Exchange Board of India (SEBI), regulators, ministry of corporate affairs, ministry of finance were like a traffic police without a challan book. That was the time I was posted to UK on a long duty with good foreign allowance and salary being deposited in India. I could not have asked for more, till a friend of mine, son of an Indian stock broker, visited me and advised me that I should buy NCDs or khokhas, as these were popularly known then, to gainfully deploy my funds.  I had no idea, his noble advice, will bring me face to face, with the stark reality of India’s “blue blooded crooks” of Dalal Street.
 
On my behalf, my friend bought every NCD (khokha) that came for selling. And by the time I landed back in India, the file contained NCDs of 169 companies in assorted numbers. I almost had to make a compendium to keep record of interest payments, redemption dates and so on. Willy nilly, my friend had thrust a full time job on my head and made me capable of joining CII, FICCI, Assocham or ministry of corporate affairs as a company adviser.  After all, who could know more than me about these companies?   
 
Before I expose the misdeeds of each of these companies, some headed by people of greatest eminence and national award winners, occupying chairs at IIMs, honoured at glittering functions of industry, CII, FICCI and Assocham lecturing the nation in print and television media and generally being photographed with our president, prime minister and other honourable ministers, there is also an excellent experience.
 
The best and most remarkable outcome of this ordeal was a great lesson to me.  I observed that the only companies, who paid interest and redemption amount on time, were that of Tatas.  In fact they posted the cheques four to five days in advance so that on due dates the amount is in our accounts.  That is the reason, Tatas earn highest regards and honour in India and abroad. Being fare and honest is the greatest asset of any company in the long run. Even if investors lost in Tata companies shares, no one has ever doubted the integrity of Tata management.  No other business house of India stands up to that test.
 
Reliance Industries, owned by Mukesh Ambani, the richest man in India,  paid interest and redemption amount, but posted the cheques on due date to be received by us three to four days later. This and other difference between Tatas and Ambanis are reflected in valuations of the companies today. With millions of investors, Reliance saved millions of rupees every six months in four to five days interest cost and may have been enough to finance at Boeing 727! A 27-storey house for six people, consuming Rs70 lakh every month in electricity bill, made Ratan Tata say, “How can some people even think like that”—it reflected exactly what many ordinary Indians and Reliance shareholder felt. 
 
The JK group would dispatch cheques 20 days late payable only at Kanpur, gaining 20 days more.  But then Vijaypath Singhania breaks world record in microlite flying in hot air ballooning for which he was awarded a Padma Bhushan. One of the Singhanias was heading CII and FICCI advising government and business world—but what about ethics in ensuring that your debenture holders get due interest? 
 
DLF chief KP Singh celebrated his 80th birthday in Udaipur with the famous singer Shakira performing for his guests, while his projects are being delayed for over 18 months, creating untold miseries for buyers. Now look at the salaries that CEOs of family-run companies are taking away. Navin Jindal, also a member of parliament draws Rs73.4 crore (now makes news for getting cheap coal allocation and selling expensive power), Kalanithi Maran and his wife (in the news for the telecom scam), Rs114 crore, Vijay Mallya another MP earns Rs41.4 crore for sinking Kingfisher, Kumar Mangalam Birla pays himself Rs39.7 crore, Pawan Munjal Rs34.5 crore, Sunil Mittal Rs21.3 crore respectively. This is in addition to the seven star lives that are all paid for by their companies. Some may argue, that if David Beckham gets $5 million for kicking a ball, why not a hard working CEO.  But remember these salaries are in addition to what they earn with other shareholders as dividends. 
 
The fact is that they fuel the kind of resentment that leads to an “Occupy Wall Street” sort of agitation.  My appeal to corporate world is to pay attention to public perception. Only then, your charity, donation to temples, educational trusts, and philanthropic ventures will please God and have true and lasting effect on you, your family and the society. Instead, support NGOs who speak against the wrongdoing in India.
 
Farishton se insaan banna hai behtar, magar usme lagti hai mehnat zyada
 
So what does an investor do about non-payment or late receipt of interest and redemption amounts? Complaints to SEBI had no effect at all. The market regulator used to respond three or four months later with a routine printed postcard carrying some reference number that matter is being taken up with the company. Nothing happens. The ministry of corporate affairs and ministry of finance won’t even respond, despite repeated reminders. Companies do not care, many have changed registrars and addresses as well; and imagine we are talking of secured debentures.  It was open loot. That was the shameful state of affairs. In Dubai, I happened to meet Rajinder Singh Batra, chairman of Rajinder group of companies who looted Rs1,600 crore through NCDs and Rs3,000 crore from Indian banks, who was laughing at Indian procedures. (For the record the Rajinder Steel group, which began life in Kanpur is among those companies which simply dumped their Indian operations and walked away in the last 1997, when a slew of steel majors turned defaulters and were bailed out by the banking system—banks in turn are bailed out by the exchequer. None of the lenders have made any attempt to trace Mr Batra who is apparently living comfortably in Dubai). No wonder, India’s face is completely blackened today in coal, 2G & other scams. Unchecked animals and animal spirit. Financial crime, even of the scale that Rajinder Steel indulged in, goes unpunished, because it would expose the complicity of the lending organisations and their employees. 
  
Be aware, companies are again raising NCDs and that too unsecured. Many of these are in the realty sector offering dubiously high returns are hawked by well known market intermediaries. SEBI and the government should be pro-active to avoid reoccurrence of loot.  If companies can deploy funds gainfully and regularly pay the investors, it is a noble and nation building activity. 
 
First time in the history of mankind, so many people are retiring or becoming senior citizens at such a pace. In India alone, 22,000 people turn 60 every day and about two lakh state and central government employees retire every month, many in lakhs from the private sector. Imagine the scope for tour and travel, wealth management and insurance companies. This is unprecedented and their money needs to be productively channelized. Creating vibrant debt market therefore, is urgent.  
 
Ideally, NCDs must be listed and pay monthly or quarterly interest, not yearly and report their net worth or non-performing assets (NPAs) every quarter to the RBI and SEBI. Their directors should deposit personal post dated cheques and passports as precautionary and deterrent measure.  In short, stringent and regular monitoring is paramount to avoid scams and unscrupulous entrants.  CII, FICCI, Assocham, ANMI and media can play heavenly role in encouraging investment led growth of our mother India.
  
First promoter on my list starting with alphabet A is the owner of Apple Industries (he is a regular on Page 3 along with his wife), who also owned Atash Industries. He is now the MD of Hexaware, a poster boy of business channels. Apple Industries would not pay interest on time and we got our 1st and 2nd instalment of debenture redemption after many reminders. The third instalment never came no matter what we tried, even visiting his office at Fort, Mumbai. Probably the company became sick, but the promoters are hale and hearty and in brand new avatar. For more details on all these companies please access www.watchoutinvestors.com  
 
Hamse poochho izzat walon ki izzat ka haal kabhi, hamne bhi is shehar mein reh kar, thoda naam kamaya hai.
 
(Commander SS Kumar is a retired commander from Naval Aviation Branch. He is a gold medallist in Mechanical Engineering and had done his MBA from Jamnalal Bajaj Institute of Management Studies. He received his initial training in aviation in UK for three years. He was also posted in the US embassy for four years.) 
 
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    COMMENTS

    suneel kumar gupta

    7 years ago

    Route cause of the problem is judiciary & lack of information .I often feel that people investing money in such enterprises are either driven by geed or their money is not hard earned

    S,K Gupta

    SHIVENDRA KUMAR

    7 years ago

    Dear Sir,

    I am really thankful to Col S S Kumar for this straigt forward letter on Indian Crooks who are managing Big Fraud Companies, I myself work with Stock Market under a Share Broker and I find many times stock price movements without any justified reasons and poor retail investor trapped into it. In many cases we see investor looses everything. I saw in many cases investor takes loan and invest in these companies. This is a good website where we get good information. We are making this profession dirty, by recommending Fraudulent Investment Plans.

    Dayananda Kamath k

    7 years ago

    jindals were geeting subsidised gas cylinders more than one per day. may be that is the reason govt limited it to 6 per family. but one perday was not for the entire jindal family i suppose.

    shivkumar

    7 years ago

    Investors need to remember that not just NCDs, but even secured debentures can fail you. Normally Company's assets are already mortgaged to Banks and FIs, leaving little security even for secured creditors.
    Few months back Moneylife had carried my article 'How secure are Secured Debentures'. Remember even genuine companies can let down the investors very badly; there are many such instances.

    So dont fall for the higher rate of interest offered on such instruments.

    Ramesh Poapt

    7 years ago

    There are many such Shree 420 companies...kindly expose details of the same..Salaam ML/Author for this!

    Apoorva Raval

    7 years ago

    Yes I agree there is some Risk in NCD Investment, but all promoters or companies are not fraud, I think investor should check companies background before investment and also do regular checks on its financials, But as of now I can Say the company named above have not default on interest or on capatial

    SUTANU GUPTA

    7 years ago

    Excellent article. A good and timely warning.

    M Muralidharan

    7 years ago

    By sharing the personal experiences, the author has cautioned the public. THat is good. It only says what is generally known in whisphers. Few may have had good experiences as well. However, when individuals want to take a investing decisions, these write ups are inputs to decide. Finally, investors have to be responsible for their actions. We have a lot of work to do in FAIR law enforcement in India.

    Hemant

    7 years ago

    Seems biased writeup,just to create sensation.Nowadays interest is credited by ecs.I have invested in Shriram transport/Shriram citi/Manapuram debentures & getting dues on due date only by ecs.This write up reminds me TV Media which creates sensational headlines to gain attention.This is not expected from MONEY LIFE.

    sachchidanand

    7 years ago

    I also an investor in FD's/ NCD's / FCD's / PCD's of Roofit Industries ,Sunearth Ceramic, ( both from Advani group ) Rajinder Steel , Atash Industries, Mazda Industries ( where H.P. Ranina renowned Supreme Court Lawyer ,is a Director) BWL , Montari Industries ( Ranbaxy Group), GR Magnets , Topline Shoes ( Sunil Gavaskar is a Director), Motorol etc and have followed up with each of these companies for last ten yrs. My experience is similar. While the companies have become BIFR / Sick , the promotors have become filthy rich, healthy and socially active !
    SEBI ia toothless tiger and have chosen to become mute spectator and may be in collusion with the dishonest promoter, Merchant Bankers have gone scot free, Auditors have never reported correct financial position to shareholders and are simply ineffective.Investors need to be very cautious

    Pankaj Kapadia

    7 years ago

    The article says lot about irrelavant sensational statements."Beware" msg is well taken but naming company like India Infoline, Muthoot Finance, Shriram City without any evidence and comparing with his past experience is incorrect. The author should have explained what mis doing is happening with ncds of recent times. So many co. looted primary mkt in 1994-99. Do we stop investing in IPOs? India infoline pays monthly interest!!! .

    REPLY

    Sucheta Dalal

    In Reply to Pankaj Kapadia 7 years ago

    Maybe you should read Mr Paradkar's comment above which adds to what the article has said. As to your question --"Do we stop investing in IPOs?". The answer is yes. Not only in IPOs but also in the secondary market.
    That is why India's investor population has dropped from 20 million to 8 million in 2 decades of liberalisation.

    Nilesh KAMERKAR

    In Reply to Sucheta Dalal 7 years ago

    Ma'am

    Contrary to the popular opinion, there are opportunities for making good profitable investments in the INDIAN stock markets.
    I entirely agree with your views on investing in the IPOs, though would beg to differ on investing in the secondary market . . . because at all times there are opportunities to profit by investing ( & not by speculating) in listed companies at reasonable ( and sometimes at bargain) prices.
    As an investor, one cannot afford not to invest in equities; though the extent of an individual’s exposure to equities may vary depending upon the risk appetite and the ability to withstand the consequences incase of a loss. For without risk, there is no return. . .
    It is simply mouth watering to think that just 8 million Indians invest in the stock markets (Warren Buffett ‘s words are ringing aloud “What the fool does in the end, the wise do in the beginning). It is by far better to invest now in the Indian stock markets than come late to the party, though, there’s no reason to rush to invest into equities headlong.

    Nilesh KAMERKAR

    In Reply to Pankaj Kapadia 7 years ago

    For the sake of investors nobody wants these companies to default. But, the question that must be asked: why do companies 'need' to borrow at a higher cost and that too from the retail public? especially in times like today when lower cost debt can be sourced from Banks, MFs and Insurance Cos. Or is the Co.

    The correct way of saying it is . . . ABC Co has paid monthly interest so far.

    The prudence lies in being careful rather than being hopeful about the future financial health of regular borrowers.




    Pankaj Kapadia

    In Reply to Nilesh KAMERKAR 7 years ago

    Bank do not lend money at less than 15% except home loan. Shriram gets 24% on used truck finance. They are good at collection and that is why such rates are affordable for them. These comapanies bears 2% expenses on 5/6 year ncd. which work out around 0.40% pa. This is justified and also competitive enough to challenge fd rates.

    jagadeeswaran deventhiran

    7 years ago

    The article is at best can be considered as a rant against industrialists rather than useful information for retail investors.....

    A COMMON INDIAN MAN

    7 years ago

    the crux of the article is that our regulator is just HELPING looters like india infoline and muthoot,i was a victim of India infoline whose chairman Nirmal jain is just not better then rajinder singh,when i lost huge sum in trading due to wicked policies of infoline,and such persons are allowed to issue unsecured debentures by REGULATOR(to be understood as puppet to these scam makers).so just learn the lesson of "BEWARE OF BLUE BLOODED CROOKS"

    kpushkar

    7 years ago

    this reminds me of the heydays of IPO's in '90s..harshad mehta time.

    i had been to couple of companies in Baroda/Ahmedabad, where the factory was supposed to be there.it had a watchman, unpainted walls , no plaster/ no machinery .. and well issue got oversubscribed. some of these guys went to jail later on.

    REPLY

    MOHAN

    In Reply to kpushkar 7 years ago

    During the Harshad Mehta time I had investments in companies named THAPAR FOODS, PREMIER INDUSTRIES , OMEGA AGRO etc. etc., These companies later vanished into thin air !

    Nilesh KAMERKAR

    In Reply to kpushkar 7 years ago

    Those who went to jail would have surely come back, but the retail investor's hard earned money just went; never to come back. . .

    MOHAN

    7 years ago

    Chief Minister of Kerala, Mr. Oommen Chandy's daughter is married to Muthoot. There were allegations against Muthoot during the last Assembly by poll election. The Left front people caught Muthoot people red handed while giving away money to voters.

    REPLY

    MOHAN

    In Reply to MOHAN 7 years ago


    Talibanic circular from Muthoot to it's staff

    http://www.haindavakeralam.com/HKPage.as...


    Why is the Muthoot group to which OOMMEN CHANDY's son in law belongs given a stake in DSC and the Free economic zone at kochi?

    http://www.harthal.com/php/writeToPartie...

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

    An army officer narrates his harrowing tale of how his life savings got wiped out at Motilal Oswal, his victory in consumer courts and how SEBI took the brokers’ side despite clear grounds of fraud and forgery. And SEBI is supposed to protect investors’ interests!

    The very first sentence in The Securities and Exchange Board of India (SEBI) Act, 1992 states as follows:
     

    ”An Act to provide for the establishment of a Board to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith or incidental thereto”.

     

    Has SEBI lived upto this? Or does it work for the big guns of the industry. Hear my story and you be the judge.
     

    I opened an account with Motilal Oswal Securities (MOSL) on 14 February 2006. Three months later, by 26 May 2006, I got wiped out. I had become a victim of unauthorised trading. I signed NO delivery instruction slips and yet my stocks were sold. I still wonder how! The broker will not tell me how he managed to dispose off my stocks without my authorisation/delivery instruction slip. My life savings were liquidated. I was seriously considering suicide. It took me two years to come out of the shock and the consequent severe setback to my health. Even to this day I am unable to comprehend how a broker can do it so audaciously and still get away. Unbelievable but true.
     

    SEBI is fully aware of such a rampant practice and has issued a notification about it a year ago. (http://www.sebi.gov.in/cms/sebi_data/attachdocs/1314271320898.pdf )
     

    I went to District Consumer Forum. I have never been to any court in my life up until then. My lawyer lost the case. Most lawyers do not even know what demat is. I went on to appeal to the state commission, in Bangalore. This time I decided to argue the case myself. The judge was convinced of my plea and sent the case back to District Forum for retrial, directing all evidences and witnesses be examined thoroughly.
     

    The retrial was exhaustive and took a long time. At the fag end of the retrial, for the first time, MOSL stated that the sale was done on the basis of Power Of Attorney (POA) given by me. This was a surprise not only to me but also to the court to whom MOSL had earlier given the copies of agreements, under oath, which did not contain any POA. I never signed any POA and a senior MOSL official gave a letter in writing to the court to that effect!
     

    The District Forum found out that the POA turned out to be bogus and gave a speaking judgement in my favour, pointing out all the flaws and infirmities, in detail, covering about four pages on the POA alone. My signature, it noted, was a photocopy as I never signed any POA. This judgement was later fully upheld by the state commission.
     

    On 7 July 2011, I lodged a complaint to SEBI (vide SCORES-SEBIE/MH11/0000764/1) through its SCORES redressal mechanism, and, along with it, I sent the full judgement copy. On 21 April 2012, after nine and a half months (!), SEBI disposed off my complaint in an evasive and indifferent manner. I thought SEBI will be outraged to hear that stocks are sold away on the basis of such bogus and fraudulent POA. I was so wrong! SEBI was least perturbed as if it was a routine matter to them.
     

    SEBI acted like a post office—it sent my SCORES complaint to CDSL to whom MOSL, this time, produced an entirely different POA, somewhat correcting the mistakes pointed out by the consumer court, again with my signature photocopied. Strangely, neither CDSL nor SEBI found it odd and weird that any one would sign two POAs on the same day for the same purpose! Both POAs did not have proper identifiable witnesses. The date of signing the document was overwritten and the place was scribbled in one and absent in the other. In the second POA, the seal of the authorised signatory is not MOSL while the first POA, it is different from the one that is in the main agreement.
     

    If only our SEBI is fair and strong, will any broker dare indulge in such acts which erode the very sanctity of stock market operations of our country.
     

    SEBI just did not want to be bothered about looking into all this, despite nine and a half months, an inordinate time it had taken. What did SEBI do for nine and a half months with my complaint? CDSL, predictably, upheld the broker's version and SEBI did the post office act of forwarding that to me. Will any broker own up to the crime committed? Why did SEBI fail to apply its mind?
     

    Had SEBI applied its mind, it would not have taken it more than nine and a half days to verify and come out with a ruling worthy of the trust and mandate conferred on it by the nation. Even an illiterate person would have discerned the blatant fraud, which is so very obvious, prima-facie. Yet SEBI chose to be blind, intentionally or otherwise.
     

    When I make such a serious complaint, even providing all the proof, the least I expected was to be told by SEBI whether my complaint is valid or not. If valid, I am entitled to know that action is taken by SEBI. If not, I am entitled to know the reason. Consumer courts did a far more superior, better and speedier professional job than SEBI.
     

    After seeing the indifferent and callous way SEBI disposed off my complaint, I wrote to all the concerned SEBI officials, with a copy to the Chairman, SEBI. No one, including, of course, the Chairman cared to reply, one way or the other. I wonder why? Is this the way SEBI believes in 'protecting investor interests'?
     

    I feel exasperated that I am left with no other option except to write this open letter. I am enclosing copy of my mail addressed to no less a person than President of India himself, who until recently was the finance minister. I thought it is my duty to let the President know, especially when there is a call to induct more investors by giving tax incentives.
     

    Will SEBI ‘protect the interests of investors '? Will investors also have to run from pillar to post, because of an indifferent SEBI? Will they also get the same apathetic treatment after they lose everything and approach SEBI for justice?
     

     (Wing Commander CR Mohan Raj VM [Retd] is a winner of Vayu Sena Medal [Presidential Award] for gallantry in the Indo-Pak war in 1971.)

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    Indian Indian.

    10 months ago

    Then finally you got justice or not @wing commander Mohan Raj.
    Please share your email ID.

    Nandita

    6 years ago

    Wg. Crd. Mohan Raj, I can only empathize with you -- my parents have faced *exactly* the same situation with Motilal Oswal, the consumer court and SEBI. I shall write the details in my blog shortly, and I'll share the details with you. I wish we could get together and bring Motilal Oswal to justice.

    Debashis

    6 years ago

    My suggestion to avoid these problem is as under
    I) In stead of one broker open account with multiple brokers dividing your investment. When a broker sees huge money he is tempted to carry out unauthorised trade.
    II) Tell your broker strictly not to do ant trade on their own. You regularly check your trades and warn them in case of any unauthorised trade.
    III) Try to open account in head office in stead of small brach offices. Normally branch offices have a target and they are desparate to meet the target.

    Naresh

    7 years ago

    The Ministry of Finance, SEBI are all prostitutes (I'm insulting prostitutes by equating them with these filthy regulators).

    We just wonder what's the rate paid by the brokers to overlook a case against them. And we call prostitutes immoral! What a double standard society we are.

    Rule of law? There is none in India.

    Investors should pull their capital out of India. Get the Dickenson out of Motilal and put of India. Use the RBI liberalized remittance scheme and park your assets in Singapore dollars in Singapore where there is asset protection and rule of law.

    JAGADEESA G CHARY

    7 years ago

    I also have a similar horrifying experience for the past 2 years. I am a retired personal who underwent multiple spinal surgeries, but still attended the IGRG, Arbitration and appeal procedures with BSE. I am forwarding my case below. Why dont we form a forum and fight the cases, because individually we become very weak compared to the mighty and all powerful lobby of Broker firms who can go to any extent to intimidate the innocent investors. I am planning to take up the matter through consumer court. Will some one answer my questions detailed in my case report below. My contact no is +918055111973 and email id - [email protected]
    I was introduced to Portfolio Management Services with ING by my RM at ICICI Securities and got a profit of Rs. 1 lac for an investment of Rs. 10 lacs within 6 months. Based on this concept the RM of ICICI securities when he joined Member’s Company (with whom the present dispute rests) has asked me to transfer my Demat shares worth nearly 23 lacs on 3-9-10 held at ICICI Sec to his company’s branch office at Pune for which he will provide a monthly earnings of Rs. 30,000 to Rs. 35,000 per month and accordingly entered into Member-Client agreement. He asked for Rs. 5000 per month as service charges to be paid as advance for every month. I have remitted Rs. 5000 to his ICICI account in the end of Aug 2010.
    The member started trading in my account without having any Orders placed on them and created a loss of more than Rs. 1 lac within the first 20 working days of opening the account with them. Alarmed I have given instructions through email on 18-10-10 to stop transactions and as per a clause in Member Client Agreement, they are not supposed to carry any transactions without my written consent to start transactions. However they continued to trade as usual and increased the losses month after month staggering at Rs. 8 lacs within 6 months. (Value of trades appr. Rs. 23 crores) The RM asked me not to respond to any of SMSes, tale-confirmations and Contract notes sent by the member periodically since they are meant only for information and nothing to do with profit generation. I have written all together 22 emails (including a few SOS mails) followed by telephonic talks with RM and AVP during the period accusing them of violating their promise of generating the profit of Rs. 30000 to Rs. 35000 per month and repeatedly asked them to stop transactions. But none of the emails were responded by their personnel at Pune. Having frustrated by their attitude I have finally decided to take up the matter with their complaint cell at Mumbai and also with SEBI. Alarmed by my this action, the AVP and RM of Pune met me at Pune railway station (as I was leaving for Chennai) and persuaded me not to escalate the matter and they will start creating profits with immediate effect. They have also sent me an email to this effect on 23-3-11 and in fact generated a profit of appr Rs. 30000 in the subsequent month.
    However having bitterly tasted their attitude, I wished to continue my tirade with their Mumbai office and SEBI. SEBI has directed me to take up the matter with BSE and NSE respectively through the laid down arbitration procedures. Though lacking the basic knowledge of fighting the case, I have personally attended IGRC meeting and 3 Arbitration proceedings, where the legal head of Member’s Mumbai branch along with an advocate appointed by them started refuting all my charges. Instead of providing suitable answer as to why their Pune personnel kept silent on my various emails and stop transactions instructions, they claimed that (1) no such verbal promise was made by their personnel, (2) they do not have any mechanism to record the telephonic orders said to have been placed by me, (3) that I have changed my mind after writing email and gave contrary instructions by phone to their personnel or the Member’s personnel met me each time I wrote an email at my residence and they claimed I have asked them to continue to trade (both the versions are totally false) and continued to placed orders. They do not have any telephonic transcripts for such conversations nor have they any recorded minutes of the meeting held with me and circulated to me by email or otherwise.
    The BSE arbitration Committee has asked me after 3 meetings to come out clearly on the extent of claim amount from the transactions taken place and to my specific query , they said they cannot entertain my claim based on cheating, Forgery (my signatures were forged by the Member on 2 documents related to NSE), manipulation of telephonic transcripts ( the Member has produced the telephonic transcripts of post transactions details shared by the Member’s Pune personnel with me, (which I strongly believe are manipulated) which the Member is strongly contending as enough proof along with the Contract notes sent by them. They advised me to take through courts for such acts of the Member.
    I have to engage the services of a chartered account to fulfill the requirement of arbitrators and the chartered accounted pointed out certain wrong transactions done by the Member and put up the claim. The award passed by the Arbitration committee went against me and I challenged the award by an Appeal to Arbitration through an advocate who also objected to the member trading the same scrip both in BSE and NSE and other errors done by the Member. The Award on my appeal was also gone against me and I was advised to seek the justice through High court. The claim amount involved in BSE is appr. 2.3 lacs.
    So far I have not started my Arbitration proceedings with NSE where my claim amount is appr. 8 lacs.
    Pl clarify:
    Is it possible to take up the matter related to BSE with Consumer forum at Pune on the grounds of cheating, forgery and manipulation of voice recordings, (since the tradings were handled by Pune branch personnel) though the Jurisdiction as per Member-client agreement is Mumbai?
    Since the transactions were conducted without any Orders placed by me (the direct evidence is not available with Member), keeping the client in dark by deliberately not replying to any of the Client’s emails, forging of my signatures, manipulation of telephonic transcripts, can I take up the matter related to my claim with NSE also through Consumer court without undergoing the tedious procedures of Arbitrations, appeal with NSE, since I have not yet started my arbitration proceedings with NSE. (It took more than a year in BSE to undergo Arbitration proceedings and Appeal)
    During my IGRC meeting with BSE, one of the judges clarified that the telephonic transcripts are not considered as evidence. Is it true?
    The award on my appeal was dated on 8-10-12. What is the permitted time limit to make an appeal in Consumer court?
    GJ Chary.
    pune

    Dayananda Kamath k

    7 years ago

    since sebi is not interested in taking action against these elite brokerages may be because they get their moolha from them.they create more hurdles for the people to enter the market by various rules which will only help brokers to quote these rules to silence the small investor. even complaints to the sebi will not get any response easily.they are more concerned with porceedure of filing the complaint than content of the complaint.

    NSriramamurty

    7 years ago

    I Bought Himachal Fibers Shares in IPO.I sold some Partly .After One and Half Decade I could not Trace my Share Certicates,Having changed many Places in Career on Transfers,Misplaced Share certificates. Being Dilemma whether I sold all Shares,I found Presant Registrar from BSE Web and wrote to Registrar to issue me Share Certificates to my Presant Address .Sinature Difference Pointed out,which is being Compleid.To avoid such Hardships SEBI shall impose following Conditions.
    ( 1 ) All brokers and Listed Companies Periodically i.e. Quarterly to send to clients Details of Shares in Demat A/C or Phisical Shares.This avoids
    Troubles of Wing commader and all Share Holders.This Rule exist in F&O Market Transactions.Companies addresses and Registrars are Changing .RBI instructed Banks to follow it.All Regulators ,if informing perodically to concerned Investors Hardships gets Mitigated.On Computerisation of all records,informing Concerned becomes easy atleast to their E-Mail IDs.
    Motilal Oswal Shall be Penalised heavily for selling his Shares and instead of accepting their mistake and settling with him ,doomed to try to create Forged Document and Harass him.

    sachchidanand

    7 years ago

    I am also a victim of fraud by some well known Companies , like Godrej GROUP and SEBI has simply protected the Company , blindly and willfully . SCORES is most ineffective , careless and Anti- Investor forum

    dinesh

    7 years ago

    n

    P M Ravindran

    7 years ago

    I am a judicial reforms activist and I have shared my experiences through blogs at http://raviforjustice.blogspot.com

    I am now convinced that all that is achieved by victims complaining to concerned authorities only helps these authorities to blackmail the ones complained against and make money for themselves!

    P M Ravindran

    7 years ago

    Yet another soldier meets his nemesis in the mafiadom that is our justice delivery system! He is lucky that the state consumer disputes redressal commission helped him in getting a moral victory of sorts. Anyhow thanks for sharing. I shall pass it on through fb and other sites that share such info. Consumers better be wary!

    pradeep

    7 years ago

    this article clearly looks extremely exaggerated. as the author said, his shares were sold without his request. this action by broken is indeed wrong but brokerage seems to be the only loss. what's so big deal, we tend to many times sell our stocks either due to news or to switch to better stocks and realize later that the former choice was better. in the course we sell, buy-sell, buy again thereby paying more brokerage than the gentleman author has paid. cheer up dude, you would have not wasted your 5 years of struggle just to prove mistake of a junior employee who would have sold your shares by mistake. the poor fellow must have lost his job also. similar thing happened with me with religare. i discussed with their senior manager and he offered one month brokerage free trading. :)
    i think issue is that we expect flawless services from brokers at most competitive price. with such expectation one should demat with icici direct and pay hefty sums as brokerage. guys, after all brokers are running a process and even a six sigma process allows 3.6 defects in 1 million.

    REPLY

    NSriramamurty

    In Reply to pradeep 7 years ago

    Every One's Outcry is for SEBI's Collusion with Brokers and Collectively Eating away Small Investor's Money. MoneyLife has brought out many instances of SEBI's Faults ,but no SEBI official cares and all Ministries Escape by simply telling SEBI is formed to take of all Investors Grievances.EveryWhere Corruption Exist.----- You Get to Realise SEBI's Blunders after a Decade's Experince with Stock Trading,wondering how your money is evaporating in this Market for No Fault of Yours bot of SEBI and Broker's Procedures.---- IN SATYAM Compuers Case,its Investors in USA and Europe sued the Company for Millions of Dollars and they got Reimbursed by Mahindra Satyam by Paying Huge Amounts and Settling with them-Indian Investors pitiably Cried Suffering Huge Losses- because our LAWs are defective.Their Lapses should be Punished with heavy Penalties,so that they can not be so Careless in Cheating Investors/ Traders.

    P M Ravindran

    In Reply to pradeep 7 years ago

    Only brokerage seems to be the loss? Wake up dud! Even the capital had vanished!

    Vaibhav Dhoka

    In Reply to pradeep 7 years ago

    E securities have opened floodgate of corrupt practices,cheating by brokers.You seems to be worried about brokerage staff,but have no remose for investor loosing.This attitude hardens criminality of brokersge houses.

    Vaidya Dattatraya Vasudeo

    In Reply to pradeep 7 years ago

    It seems your view are based on the fact that the Broker accepted the mistake and did compensate you. I wonder what would have been your reaction if that had not happened.

    Do you guarantee on behalf of icici direct that the service will be par excellence. And no matter what price you are charged, if a service is offered it must be excellent. No body has forced Motilal to be in this business.

    arun adalja

    In Reply to pradeep 7 years ago

    here question of trust comes in picture and all brokerage house do such things then entire concept of depository is lost.how can they use poa for such things without consent?their depository licence must be suspended and heavy penalty must be imposed.sebi always favours exchanges and brokerage houses.

    Amit Bhargava

    In Reply to pradeep 7 years ago

    No offence meant, but in the absence of proper disclosures, I would assume that you have a conflict of interest. Your post here, is shocking.

    Amit Bhargava

    In Reply to pradeep 7 years ago

    Dear Pradeep,

    I would like to hear from you when your broker uses a forged power of attorney and sells your shares without authorisation, and you end losing life long savings.

    No offence meant, but in the absence of proper disclosures, I would assume that you have a conflict of interest. You post here, is shocking.

    best

    Amit

    Bhupesh

    7 years ago

    I sympathize with you sir, I am in process of closing down my Motilal Oswal account!

    May god give some wisdom to our FM to withdraw that crap RGESS and make scam-ester pay for their mis-deed.

    REPLY

    PPM

    In Reply to Bhupesh 7 years ago

    FM is the number 1 scamster.

    ashok sen

    7 years ago

    On the face of it, Wing Commander Mohan Raj seems to be subjected to fraud by MOSL,and then to a total let down by SEBI.
    What does the gentleman do now? Can Moneylife give a possible solution for him to get justice.
    Its doubtful the President of India will take MOSL and SEBI to task.The beaurecrats in the Presidents office, and SEBI will only protect each others backside, and to hell with the citizen

    arun adalja

    7 years ago

    sebi and exchanges always favours companies and brokerage houses and not worried about poor investors.please check your demat accounts and ledger every week so that you can find out if anything goes wrong.do not give poa to broker as it is very very risky.

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