The demerged company with 80% of investor capital is awaiting listing approval since the past 10 months from BSE; bourse remains tight-lipped and refuses to hear small investors’ complaints
Market regulator Securities and Exchange Board of India (SEBI) and the Bombay Stock Exchange (BSE) seem to be least concerned about investors’ interest. Unreasonable delay in giving listing approval for a demerged company and ignoring investors’ complaints suggest that the regulator—and the bourse—both are adopting a hands-off approach. The question is—with whom does the buck stop?
Take the case of Five X Finance and Investment Ltd, a demerged arm of Octant Industries, which is yet to be listed after 10 months, holding up money of retail investors. Moneylife has reported on this issue (See: Five X, a demerged arm of Octant Industries, leaves investors in limbo ). A whopping 80% of investor capital is stuck in this unlisted company. Both the stock exchange and the company are not listening to the voice of the investors.
Octant Interactive Technologies Ltd demerged its financial division business and vested in Five X Finance and Investment Ltd, with 80% of its capital as per the
demerger agreement, on 7 December 2010. However, the company has still not received approval from the BSE.
After eight months, market regulator SEBI had granted listing approval to the company. But this time, it is the BSE which is yet to give its nod. Meanwhile, investors have nowhere to go as BSE is ignoring their complaints; the company says it is still “awaiting approval” from the bourse.
“Though there is an investor grievance cell at BSE, it is of no use. Nobody picks up the phone and (BSE) never replies to emails. What is the use of an investor grievance cell at BSE?” says an investor on Moneylife’s website.
Ninad Avasare, who had invested in Five X, said, “Does it really take so much time for getting permission for listing from the BSE? Or is the company deliberately causing this delay? Many gullible investors have been trapped by the company and they are eagerly waiting for their money.”
Interestingly, Octant Industries, which got only 20% capital, was successfully listed on 7 February 2011. We asked BSE for their stand, but it refused to comment. For clarifying matters, an e-mail query was send to SEBI too, but no answer has been received till the time of publishing this story. Meanwhile, the investors can only hope that some solution emerges in the near future.
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I AM WAITING FOR LISTING OF FIVE X FINANCE LTD. AS EARLY AS POSSIBLE.
REGARDS
OM PRAKASH SHARMA
So dont invest into any stock where business restructuring like merger , demerger etc going to be happened. Investors never gets any benefit from it controversely their fund gets locked or lost.
So it is always better that BSE and NSE should be covered by RTI as soon as possible..