At last a start : SEBI has been directed to crackdown on PNs whose ownership is opaque. Now next step : Ban PNs and confiscate it
— Subramanian Swamy (@Swamy39) November 25, 2014
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How online tipsters defraud investors
One of my readers wrote to me about an online tipster which has an interesting business model.
The promoters of this entity have opened half a dozen companies with some alluring names.If you Google “stock tips”, most of the top listed ranking/sponsored ads will belong to this entity
All the group companies advertise aggressively online using phrases such as “99% accuracy in our stock tips”/”Earn 25000-40000 Rs daily” etc.They charge exorbitant amounts for their stock tips which can range from Rs.10000-Rs25000 per month
An innocent investor/trader gets taken in by these ads and subscribes to one of the companies (say Company A).Now, these packages work in such a manner that if the investor is lucky he will hit the price target else he will hit the stop loss.Either ways, Company A has made its money.
After a while, the investor loses his shirt and stops subscribing to company A’s packages.But he still remains a sucker for stock tips.So again he Googles for “advisory” companies and this time joins Company B (which unknown to him is a related group entity of Company A !!).And then the sad story repeats itself !
Now, these tipsters have adopted an interesting business model.They have approached brokers in tier 2/tier 3 cities and have asked them to recommend their advisory services to their clients.The broker’s commission for doing so?A full 25% of the subscription fees !!
I am amazed that SEBI has not stepped in to stop these kind of schemes which are making bogus claims and duping investors.
Jago SEBI Jago !!
I had posted yesterday about the problems faced by senior citizens due to paper shares.
An 80+ investor wrote to Karvy registrar for the issuance of duplicate share certificates for splitted shares.
Here is what Karvy wrote to him:
From: “anitha.puttigari@karvy.com” <anitha.puttigari@karvy.com>
To: gopaldas_bkn@yahoo.com
Cc: bhanutej.patil@in.abb.com; b.gururaj@in.abb.com; karthikeyan.ea@in.abb.com
Sent: Tuesday, October 9, 2012 12:46 PM
Subject: Splitte Shares
Sir,
With reference to your email, kindly send us the following documents for issuance of duplicate share certificate of Rs.10/-.
** Certificate Details **
========================================
Sno Cert_No Shares Dist_From – Dist_To
—————————————————————-
1 26038-26039 20 7723695 – 7723714
2 17555-17556 13 12457420 – 12457432
3 31613-31614 11 24505636 – 24505646
4 251323-251327 14 37293605 – 37293618
—————————————————————–
========================================
Sno Cert_No Shares Dist_From – Dist_To
—————————————————————-
1 26038-26039 20 7723695 – 7723714
2 17555-17556 13 12457420 – 12457432
3 31613-31614 11 24505636 – 24505646
4 251323-251327 14 37293605 – 37293618
—————————————————————–
1. Lodge a complaint with Police Station and submit a copy of FIR (mentioning share certificate no(s) , unit name, folio no. distinctive no(s) and no. of lost of shares) in original or attested having clear impression of rubber stamp of the concerned Police Station, ( in case of copy thereof please note that it should be duly attested by first class magistrate or Notary) or acknowledged Police complaint. In case of complaint /FIR is in regional language, then a copy of the true translation of the same in English duly notarized by a Notary Public should be submitted along with the FIR.
2. Execute Indemnity & Affidavit on a non –judicial stamp paper of the value of Rs.200/- & Rs.100/- duly attested by Notary Public/Special Executive Magistrate respectively as per the proforma enclosed. Affidavit should be attested by notary with appropriate notarial stamps affixed together with the seal the registration no of the notary.
3. Stamp paper must be purchased only in the name of the executor i.e. , registered shareholder.
4. Questionnaire Form to be filled in by applicant(s) for issue of Duplicate Certificate(s) in respect of security/ies for which original certificate(s) are lost.
5. Proof of identity like Pan card/Passport/Driving License of surety duly attested by Notary required.
6. Supporting documents of surety like salary certificate/pay slip or copy of latest Assessment Order passed by Income Tax authorities or Proposed valuation Report issued by Revenue Authorities/Municipal Authorities/Secretary of Gram Panchayat duly attested by a Notary/Gazetted officer. Please note that Income of surety should be more than present market value of shares.
7. Full name, address and signatures of the witnesses and sureties should appear in the indemnity bond. Surety form to be filled by same person who has signed as surety on the Indemnity.
8. Any correction/modification on these documents needs initials of the executors.
9. All the particular of the shares like folio no., certificate no. and distinctive numbers to be mentioned in the Indemnity and Affidavit.
10. Photo copy of shareholder’s Pan Card duly attested by not
11. Share holder’s Proof of residence like Electricity Bill/Telephone Bill/Water Bill/Pass Port/Driving License duly attested by notary/gazetted officer
12. Share holders latest Bank statement in original / copy of pass book
13. Share holders specimen signatures duly attested by their Bank Manager on Banks letter head mentioning the bank manager’s name, address and telephone numbers. This certificate should also show your account number with the attesting authority as proforma enclosed.
14. Demand Draft amounting Rs.1000.00 in favour of ABB LIMITED payable at BANGALORE towards advertisement charges.
15. Request letter duly signed by you for issue of duplicate share certificate(s).
On receipt of the same we shall do the needful
Regards
Anitha
Now, if this is not an email from hell, then what is?Does any body expect senior citizens to run pillar to post fulfilling all these formalities?
To be fair,Karvy is probably following the law of the land in its response.But shouldn’t SEBI step in to ease the pain of elderly investors.A simple indemnity from the investors should suffice to issue duplicate certificates.
JAGO SEBI JAGO !!
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When the going gets tough…
In our parent’s generation, getting a sarkari (government ) job was the ticket to a comfortable life
This changed post 1991 when the winds of economic liberalization shook India
But now, it looks like those times are back.
All participants in India’s equity markets are facing unusual stress.But our regulator SEBI seems do be doing great.
An article in ET states :In its budget for 2012-13, Sebi has put aside around 281 crore for the acquisition of office and residential premises. This amount includes acquisition of new office premises or plot of land in BKC for additional office space in Mumbai, setting up of five local offices at new locations, purchase of flats for senior executives at Mumbai and also the purchase of office space for a northern regional office at New Delhi.
Bottom line: When the going gets tough, the regulator gets moving !!