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
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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?
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.
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,
I don't need instructions from anyone, least of all Mr. Joshi, to move in the matter.
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,
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!
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
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
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 .
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.