Sebi lets off TSR Darashaw with warning

Capital market regulator Sebi has warned share transfer agent TSR Darashaw Ltd in a matter related to "fraudulent transfer" of shares of Tata Power, but the regulator stopped short of imposing a penalty.
While noting that TSR Darashaw had "failed to act with due skill, diligence and care" with respect to transfer of certain number of Tata Power shares, Securities and Exchange Board of India (Sebi) said that Share Transfer Agents (STA) norms "cannot be taken in a retrospective manner".
However, the order "does not preclude Sebi from taking any further action, as deemed fit, in accordance with law against them noticee viz, TSR Darashaw Ltd," the regulator said.

It was alleged that B Hemalatha, a client of TSR Darashaw, had executed a Power of Attorney (PoA) in December 1991 in favour of her father J P Balasubramaniam.
Hemalatha, who held shares of Tata Power, expired in December 1995 and in June 1996 her father forwarded the PoA to TSR Darashaw for registration.
TSR Darashaw had received 'transfer form' signed by the father for 1,900 shares of Tata Power on February 14, 2002 and had executed the transfer of shares to one Anil Kumar Bhootra on February 20, 2002.

However, it was alleged by the father that TSR Darashaw did not obtain transferor's confirmation at the time when it received 'transfer form' for transfer of 1,900 shares to Bhootra.

"It is noted from the documents and evidence available that the noticee (TSR Darashaw) was very well aware of the demise of its shareholder Hemalatha and inspite of the same the noticee transferred shares of Tata Power Company Ltd (TPCL) to Bhootra within a short period of 6 days from the date of receipt of transfer form by the noticee," Sebi said in an order dated April 13.
"...In February 2002, when the noticee received request for transfer of shares of TPCL from Bhootra, noticee transferred the shares of TPCL to Bhootra without seeking any confirmation from father/seller confirmation," it added.

However, it was submitted by TSR Darashaw that Hemalatha's father had made a complaint to Sebi with respect to same matter in May 2003, which was closed by Sebi in that year itself. It had also submitted that the STA norms are not retrospective in nature.
Agreeing with these submissions made by TSR Darashaw, Sebi said that "no penalty is levied on the noticee...In the present adjudication proceeding".