Does SEBI really pay any heed to investors’ complaints?
Moneylife Digital Team 02 September 2011

Despite repeated persuasion, investors’ complaints filed with the market regulator either remain unheard, or are disposed off with vague replies. Moneylife has had a personal experience of this

For some years now, Moneylife has heard from investors and has been writing that the market regulator, the Securities and Exchange Board of India (SEBI) functions more like an 'in and out' mail system, especially in dealing with investor complaints and grievances redressal. Although SEBI claims to respond to complaints and give a registration number, investors say that the market regulator does nothing in terms of redressal. Moneylife has had a similar experience recently.

On 26 July 2011, Moneylife sent an e-mail regarding Gujarat-based NMart Retails, which collects money from people under the pretext that they are purchasing vouchers of its retail store. It also promises a smart card, credit facility and loyalty bonus of Rs11,000 after staying/shopping with NMart for 48 consecutive months.  

Experts say that the activities of the company have features of a Collective Investment Scheme (CIS), specified under section 11 of the SEBI Act read with regulation 3 of the SEBI (CIS) Regulation. Accordingly, we asked SEBI if the company had obtained a certificate of registration to run the CIS and if not, what action SEBI was planning against the company.

There was neither any reply from SEBI, nor even a simple acknowledgement. Then on 26th August we received a letter dated 30th July from SEBI which said that the complaint is not under its purview and that the appropriate authority should be contacted in the matter.

It is interesting to note that the reply did not give any explanation as to why the issue does not come under SEBI's purview, or mention any details or reference of the complaint, which is usually done in formal letters. In addition, the e-mail was sent by Moneylife's deputy editor, but SEBI addressed its reply to Moneylife Foundation, which is a not-for-profit affiliate of Moneylife. We are also wondering, what took the letter over 26 days to reach our office at Dadar, which is only a 20-minute drive from the SEBI headquarters at Bandra-Kurla Complex, in suburban Mumbai.

Moneylife has been regularly writing about SEBI's hands-off approach on complaints and investors' grievances. (Read, 'Investor interest: SEBI's hands-off approach'.) SEBI has also introduced a new high-cost complaints redressal system called SCORES (SEBI Complaints Redressal System), which is a "web-based centralised system for the speedy redressal of grievances" that was launched in the last few days of the tenure of former chairman CB Bhave. (Read, 'Complaints redressal: SEBI's high cost experiment'.)

According to a comment posted by a reader on our website, SEBI has told him that it does not have an investor grievances redressal system. The reader says, "In a reply to my RTI application, SEBI had informed that there is no Investor Grievances Redressal System in SEBI. There is only Investor Complaints facilitation centre. It does not guarantee redressal of investor complaints. It also stated that investor should file their complaints in a court of law for redressal. So what happened to SEBI's role as protector of investors' rights? In fact, SEBI Mutual Fund refused to examine my complaint and give its ruling, when the mutual fund (company) failed to resolve a complaint of misconduct and negligence in handling an additional purchase transaction resulting in loss of NAV (net asset value) and dividends."

In one of our earlier articles, an investor commented: "If inspite of making (filing) many complaints SEBI is not taking any action against Compact Disc India, a BSE listed company, for non-payment of declared dividend for past two years and making many bogus announcements such as share buyback for delisting, big contracts, etc, then what investor protection can SEBI do?"

Another comment reads: "My case against ICICI Bank is pending with SEBI since the past eight years and they have done nothing but acknowledging. The same case forwarded by the RBI and me four times, but nothing has been done. Even recent letters to chairman has not produced any results."

This attitude of the regulator has taken a toll on India's investor population. Moneylife has repeatedly pointed out that India's investor population has declined from 20 million in 1992 (according to official reports) to just eight million (equity and mutual funds), according to the D Swarup Committee report 2009.

10 months ago
I had 5,635 shares in one company. But today it shows zero. I do not know whom to complain.
Nikhil Shah
3 years ago
Main drawback of the SEBI redressal system is that most of companies would not agree on any wrongdoings. Let me explain you Why. See SEBI Redressal Frequently Asked Question #30 :
It clearly state that if company denies wrongdoing, SEBI can not force company to resolve the complaint.
Then why any company will accept any wrongdoing (even though companies have done wrong) when they know this SEBI’s weakness? It is easy for companies just to deny wrongdoings in response and get away with all inquiries and hide wrongdoings.

The other main drawback of the SEBI redressal system is that when company denies wrongdoing, SEBI do not question back to companies and evaluate submitted proofs. SEBI rely/trust mainly on response of company to close the case and do not rely or use submitted proofs at all.

Even SEBI may not be fully aware that their own redressal system is counter productive. Companies are not afraid of SEBI after wrongdoings because of such faulty redressal system. It is hurting lots and lots of people and may continue to do so and making entire system weak. This is my opinion/evaluation based on my experience with SEBI.
3 years ago
Sebi itself is a cheat with the people
3 years ago
Sebi is the owner of these advisories companies and they loot the Investor's together. fraud sebi and advisories
3 years ago
Fraud Company ... please listen
Dear Friends,
Star world Research, Indore. is very fraud company.. one Day they will be in custody , but till date please be safe from this company. The owner and all employee are cheated to innocent investor . and then give illogical answers. They trap and collect money. But not giving any returns.
Do not give any amount to this company . they are not given invoice. Their service is very poor. their intension is only to cheat people. keep your call recording on. Also check from which Email Id they send you information. Before any dialogue ask executive KYC . because all are talk with another Name. Do not take any untrusted Service form Star World Research. If u are in Loss. Try to make Store Evidences against Star World Research. Keep writing against this company . Because if we not talk this company will done more fraud. Lets come together against this company to take a big action .
Everyone is having different story against Star World Research. But to take action we need to take action jointly.
Fraud Company Details are as below
Registration No.-INA000005499
[email protected]
Fax No.07316544487
Address-PLOT NO. 42, FLAT 201, MR-3, INDORE, MADHYA PRADESH, 452001
The Mobile Numbers of Star World Research to make fraud with Innocent Investor are-7224829162,7316679720,9575611389,7049926846,9522190098,8349327141,8435374674,9753505706.
Their are many more numbers. But be alert from This Fraud Numbers
Suresh G
4 years ago
True. Scores acts like a post office. When a complaint is lodged, SEBI asks for the comments of the entity against whom the complaint is lodged and when that entity submit their reply, that reply is sent to you. So the question, where is redressal ?? And why SEBI. They can close down SCORES. At least then there will be no pretense of grievance redressal .
pawan agrawal
10 years ago
it is very amazing that magazine like moneylife is not filing criminal case against sebi

sebi is real criminal of stockmarket
and cheating with people of india
Ramani Gopalan
Replied to pawan agrawal comment 4 years ago
Can we all come together and launch lawsuit against NSE for about 100crores
Sucheta Dalal
Replied to pawan agrawal comment 10 years ago
Mr Agrawal

It is really surprising that you should even expect Moneylife magazine to file any complaint at all. Moneylife already does more than any media entity, but being strongly pro-investor at all costs and sacrificing advertising in the process.
No magazine we know of does this.

Moneylife is also the only media entity that has gone a step forward and set up an not-for-profit entity that holds seminars, sends petitions to the government and educates people on NOT investing in fraudulent companies. As a 2.5 year old entity, with meagre resources that is the best we can do.

It is for people who invested in such companies to get together to file cases against cheats. They can also work at ensuring that their friends and relatives are not cheated. One way to do it is to get them to avail of FREE membership to Moneylife Foundation and attend a few free seminars.

After all, wont people put in some time and effort to keep their own money safe?

Replied to Sucheta Dalal comment 10 months ago
I really wonder, while I am comfortably seating at home with folded hands, how come nobody is coming forward to help me, particularly Moneylife Foundation. While I am still seating at home, how come the rest of the people are not coming together to fight for my grievances. Nothing stops anyone from going to Consumer Courts and explicitly disclosing the names of the people and companies against whom one has grievances, in order to alert others.
Nikhil Shah
Replied to Sucheta Dalal comment 3 years ago
This is not about keeping our money safe. This is about getting our money back which we lost where there is not our fault. We already lost money because of companies fault. We lost peace and happiness in life. Even we invest further time, there is no guarantee that we will get our money back in corrupted world. Even we get money back, we will not get back our invested time.
There should be a government body which should give justice right away when we show proofs of frauds. There should be system that companies should afraid of wrongdoings or at least accept wrongdoings right away. When companies do wrongdoings and then after complaining do not accept wrongdoings, it is called obstruction of justice. In all other countries in the world, there is severe punishment for obstruction of justice, much more punishments including jail term than civil punishments for original error/mistake. This should be put into effect in India. Then all companies will accept their wrongdoings much faster and earliest.
Vaidya Dattatraya Vasudeo
Replied to Sucheta Dalal comment 4 years ago
I fully agree with you. What Moneylife is doing is an excellent job. We should not expect anything beyond guidance from Moneylife.
Ramani Gopalan
Replied to Sucheta Dalal comment 4 years ago
Pls let us all come together and file a case against NSE 100crore lawsuit
Rupesh Patil
Replied to Ramani Gopalan comment 4 years ago
Hi I agree i believe SEBI has partnered up with some regulators and small cap companies to rig the market. I lost very badly in some micro stocks. Despite complaining to SEBI they did not even both to revert.
Vaidya Dattatraya Vasudeo
Replied to Rupesh Patil comment 3 years ago
I wonder what stopped you from disclosing the scripts which caused you some fraudulent loss. And how did it happen? Maybe there are some who can help you file the case. And it will also alert the rest of the community.
1 decade ago





Ramani Gopalan
Replied to mukesh comment 4 years ago
Pls let us come together and file a lawsuit against NSE 100crores
Rupesh Patil
Replied to Ramani Gopalan comment 4 years ago
I agree.
1 decade ago
Sebi's system of Investors complains is hopeless. It in fact just helps companies to escape complains by replying vaguely and updating the status as complain resolved. It never looks into what the investor has complained and what has been replied.The investor just is expected to keep on complaining till he compromises with his loss and stops.
1 decade ago
Unsubscribed accidentally. Re-subscribing.
1 decade ago
If some one knows the legal way to file complaint against SEBI, please to guide us. My complaints are too old to be taken up. But the rest of investors will be benifited. And I may need to use it in future.
Ramani Gopalan
Replied to vaidya comment 4 years ago
Yes I spoke to a lawyer he is asking to file a pil if we all come together and file a case against NSE we may win the lawyer is asking 2lacs so if we 20 people come together we can split the cost
pawan agrawal
Replied to vaidya comment 10 years ago
file criminal case against sebi
i have already filed criminal case against sebi
i would guide you
pls send me details of your complaint
Ramani Gopalan
Replied to pawan agrawal comment 4 years ago
Pls sir we all come together a for pil against nse
Replied to Ramani Gopalan comment 3 years ago
Dear Mr. Gopalan, I am a recent victim of a premium broker who is a 100% subsidiary of one of largest private bank. I am also contemplating a legal complaint against them as perhaps there is no other way out. In fact I am quite surprised to learn from the various negative comments posted here about the working of SEBI. Your suggestion of filing a PIL is great. Is it possible to have a conversation with you as I would be able to gather some thoughts.
Vaidya Dattatraya Vasudeo
Replied to 2000rtandon comment 3 years ago
You should consider filing a case in Consumer Court. I am not an advocate, but I have done these things. I may be able to assist you in the matter, with a disclaimer that I will not be responsible if you suffer any damages or losses or such other things because of me, irrespective of the fact whether it is my mistake or not.
Boodugere Nagaraj
1 decade ago
SEBI is least concerned about grievences of the Investor. I feel what they do when complaint is received, is to acknowedge it instantly and then throw it to garbage. That is the end of it. Nobody knows the fate of their Fixed Deposits in NBFCs which were entrusted to the Liquidators, ten years ago ! The Investors are mainly retired officials, who lost their entire life time savings. Those who are still alive say that there is nexus between Official Liquidators, SEBI and the Company Management.! A Lokayuktha like Justice Santosh Hegde has to investigate and hang these honourable criminals ! SEBI has never helped investors to get back their hard earned savings.!
Harish Bhadada
1 decade ago
I also have exactly similar experience about my complaints filed with SEBI.

1st complaint was filed on 18.9.2010 against Aditya Birla Money Mart Limited for their “Birla Option Maxima” scheme. However SEBI has done nothing except forwarding complaint to BSE and NSE for investigation. Now complaint is pending with NSE and I donot know any progress inspite of reminders to NSE.

2nd complaint was filed against Fidelity Mutual Fund by E mail on 28.5.2011 for which they have sent me acknwoledgment REF.No. 2011/0025927/01 dated 24/05/2011(??) stating that they are advising converned AMC to resolve and reply directly to me with a copy to them. In case it is not resolved with in reasonable time they have a system in place for giving reminders periodically. That's all, neither AMC is bothered nor any action from SEBI

I think these companies are fully aware of SEBI working and hence not bothered for individual investor's grievances
Vikas Gupta
1 decade ago
You are very right in writing that SEBI is not taking any action on the complaints received from investors through SCORES. I myself have made various complaints against Karvy MFS(R& T of UTI & Reliance Mutual Fund) in which one of its Employee has done a cheating of 420 along with all proofs with me, HDFC Mutual fund, M/S S S Corporate Securities Ltd., Delhi a Broker of NSE & BSE for auctioning my shares even after in their Dmat Account. But SEBI is not responding at all. Somebody should take come corrective measures.
1 decade ago
My experience is that Sebi acts like an ordinary postman. After the complaint is files, if the person against whom the complaint is filed, reports that the complaint is resolved, that is the end of the process. It never returns to the complainant to find the facts. I have stopped reporting complaints to Sebi, long ago. I have successfully taken help of Consumer Courts
nagesh kini
Replied to Vaidya comment 1 decade ago
Post Offices at least render good services. Toothless our so-called regulators are. They neither can bark nor bite. At worse their concept of penalty is 'settlements' that take the accused off the hook.
The other the Regulator for Accountants, the ICAI is a shade worse. Letters/mails from members to its President are neither acknowledged nor responded. It is still mulling over action to be taken on the member who signed the Satyam accounts. He happened to be, of all things, the Chairman of the ICAI's Ethics Committee. God help such regulators!
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