Sharepro in dock as more firms approach police

Britannia Industries, Asian Paints and Aptech said they have terminated their agreement with SharePro due to certain irregularities

Nearly 10 big companies with Sharepro Services as their registrar and transfer agents have approached the city police's economic offences wing (EOW), alleging irregularities on transfer of shares and encashment of dividends.

Britannia Industries, Asian Paints and Aptech, in an announcement to the stock exchanges, have said they had terminated their agreements with SharePro. Aptech and Asian Paints have filed a criminal charge against Sharepro; Britannia has approached the EOW. “We are examining the First Information Report,” said a senior official of EOW.

Asian Paints has also sought the arrest of Sharepro's managing director, G R Rao, and operations head, Indira Karkera.

Registrar or transfer agents like SharePro maintain the detail records of shares of listed companies and their holders. The alleged fraud involving 10 companies is pegged at Rs 25 crore nbut could even be Rs 100 crore if more companies are involved, said a source at EOW.

According to the police officials, 156 big companies are associated with Sharepro and are coming forward with complaints.

An e-mail sent to Sharepro didn’t elicit a response.

According to sources, the Securities and Exchange Board of India has also begun a probe after the Asian Paints complaint. “The company had discovered certain irregularities at Sharepro with respect to share-related operations and dividend encashment activities. After preliminary internal investigations, (we) filed a complaint with the EOW for further investigation...This is without prejudice to (our) rights to initiate appropriate civil and criminal proceedings against Sharepro and its employees,” said Britannia in a notice to the BSE on March 19.

In Aptech’s case, Oriental Insurance Co and UTI India fund held 4,152 shares and 10,980 shares, respectively. The shares were illegally transferred into the accounts of two unknown employees of Sharepro. “Prima facie scrutiny reveals transactions which are inappropriate, unauthorised,” Aptech had said in an announcement to BSE.

The method seems similar in all the complaints, said an official. The FIR by Asain Paints alleges the same pattern, that the shares of shareholders were transferred to the accounts of Sharepro employees. According to the FIR, dividend amounting to Rs 65 lakh of different shareholders and 8,460 shares of one shareholder named Rekha Parekh worth Rs 71.91 lakh and 7,330 shares of Amarjit Kaur Arora worth Rs 62.30 lakh were sold to others without their consent.

ALLEGING IRREGULARITIES

• About 10 firms approached EOW against Sharepro Services
   
• Asian Paints and Aptech filed criminal complaint against Sharepro
   
• Fraud could be over Rs 25 crore, which could go up to Rs 100 crore, say police
   
• Sebi too launches probe against Sharepro
   
• Asian Paints, Aptech, and Britannia terminate agreements with Sharepro
   
• Allege irregularities in dividend encashment and share-transfer activities of Sharepro