Bse, Uti Showdown On Mastergain Issue Likely

The Bombay Stock Exchange governing board is expected to take up the issue of UTI Mastergain and Masterplus share units. This is likely to trigger a new row.

According to BSE governing board sources, a final decision is expected at the governing board meeting on August 25.

A three-member team of the BSE governing board members met the UTI top brass recently to discuss the issue. According to a BSE governing board member, they requested UTI to pursue the matter with Datamatics and take appropriate action to replace and rectify documents relating to Mastergain and Masterplus shares.

The board is expected to decide on the action to be taken based on following issues discussed with UTI:

 

lThe delay caused by Datamatics Financial Services to return Mastergain and Masterplus share certificates under objection. This resulted in buyers not being able to approach the concerned introducing broker for replacement and rectification. If the introducing broker is not able to take up the responsibility then the buyer is not able to use the exchange arbitration mechanism.

BSE believes that the buyer members cannot be held responsible for the inordinate delays on part of the registrars in returning share certificates under objection through the custodian. The exchange takes a view that the matter is solely between UTI and its registrar, Datamatics.

lDatamatics Financial Services has also returned Master Gains/Master Plus shares under objection lodged with them in 1994 stating that duplicates have been issued in 1995.

BSE contends that although original documents were lying with Datamatics Finance Services for transfer, the duplicate thereof were issued without checking or correlating and perhaps without following due procedure thereof.

A section of BSE governing board members are of the view that there is a violation of BSE bye-laws and an appropriate action needs to be taken.

UTI sources contend there were fake certificates in those mentioned by the BSE team. The BSE team wanted UTI to validate fake share certificates found in the process.

"It is impossible to validate any fake certificates. Bad deliveries can be rectified. However, UTI cannot take responsibility for fake certificates," the UTI source said.

UTI claims that it conducted amnesty schemes in 1996 and 1997.

"We have resolved most of the pending cases. For all practical purposes, the issue is a thing of the past. We are surprised that the BSE is taking up this matter in the governing board," the UTI source added.

In 1994, UTI announced a buyback scheme for its Mastergain 92. It received an overwhelming response and its registrar could not cope with the huge pile of certificates lodged by investors. UTI has already admitted that there was a delay in completion of the process.