Pinnacle moves SC against Sebi

Pinnacle Shares Registry today challenged market regulator the Securities and Exchange Board of India's (Sebi) order cancelling its Registrar and Share Transfer Agent (RTA) licence before the Supreme Court.

The Sebi had cancelled the RTA licence of Pinnacle Shares Registry (PSR) in October, 2009, and asked the firm to wind up its business.

Sebi, in its probe, had found alleged fraudulent transfers of shares of genuine shareholders of Parsoli Corporation, a non-banking finance company and stock broker, to its promoters, Parsoli, and to their front entities by Pinnacle Shares Registry (PSR).

During the proceedings on the matter, a Bench headed by Chief Justice S H Kapadia adjourned the matter after it was informed that an appeal by Parsoli was already pending before it.

"Since the matter against Parsoli is pending, this appeal stands adjourned for twelve weeks," said the Bench, which also comprised Justices K S Radhakrishnan and Swatanter Kumar.

Earlier, the Securities Appellate Tribunal (SAT) had on April 30 dismissed the plea of Pinnacle Shares Registry challenging the orders of Sebi.

Sebi had banned the firm from doing any fresh business after it found it guilty of delaying dematerialisation requests and also for rejecting many such requests on improper, false and misleading reasons.

The regulator had inspected PSR's documents after some shareholders of Parsoli Corporation complained that their share transfer requests were rejected. PSR was the RTA of Parsoli.

Sebi had found around 450 instances where the shares of genuine holders of Parsoli were fraudulently transferred to individuals belonging to the promoter group of Parsoli. The transfer of these shares had been effected on the basis of forged signatures on the transfer deeds.

PSR had also rejected share transfer requests of genuine shareholders on the grounds of signature mismatches, whereas the shares were already transferred in favour of the promoters of Parsoli or their front entities.