Investor threatens action against broking firm

While applying for the Bank of Maharahstra shares during its public issue, B R Parekh of Rajkot might not have thought that an investment decision would turn out to be a nightmare.

He has threatened legal action against the broking firm and has demanded action against the branch head of the firm, alleging that negligence of the firm caused him financial losses and mental agony.

In a letter to the Chennai-based Integrated Enterprises (India) Ltd, Parekh has claimed that the Rajkot branch accepted his application forms, and a fortnight later returned them stating that he had given non-MICR cheques.

"If there was a problem with the cheques, the forms should have been returned to me immediately, or a day later or even before the issue closed. The forms, along with the cheques were returned to me 20 days after I applied. This, despite the fact that I had sought receipts for the forms on at least a dozen times after submitting them," said Parekh.

Explaining the sequence of events, Parekh said that he submitted three separate application forms of the public issue of Bank of Maharashtra to the Rajkot branch of Integrated Enterprises on February 26.

The forms (number 3182089, 3182090 and 3182091) had applications of shares for 200, 300 and 400 respectively in the name of B R Parekh, A B Parekh and C B Parekh.

Parekh said that the firm accepted the forms and the cheques and asked him to collect the receipts the next day. Though he visited the firm on the next day (February 27), he was asked to collect it the next day.

He went to the firm's office for the next five consecutive days, but got the same reply. "I was told by the branch manager R Ramanathan that the receipts will be given the next day," Parekh said.

On March 11, Parekh told the firm that he will send a complaint to the head office if his receipts are no given to him. "A day later, I received a package containing the application forms and the cheques. No reason was given for not accepting the forms," Parekh said.

When he went the next day to demand an explanation why the forms were returned, the branch manager told him that it was because he produced non-MICR cheques. R Ramanathan, branch manager of the Rajkot office of Integrated Enterprises, said he has not received any complaint from Parekh.

"We received a lot of applications for the Bank of Maharashtra issue. I did not get any complaint from Parekh regarding negligence on the part of our company," the branch manager said.