Mico To Seek Nsdl Help On Fake Shares

The Bangalore-based Motor Industries Co (Mico) has decided to approach the NSDL to tackle the issue of counterfeit share certificates floating in the market. According to Mico sources, the issue came to light when some counterfeit share certificates were lodged with the company for transfer from Mumbai.

This prompted the company to issue a public notice in Mumbai-based newspapers, cautioning its shareholders, public and intermediaries in the capital market, of bogus share certificates.

Sources say, joining the NSDL will be the first step among a series of options the company is considering to put an end to the problem. The prime among them will be dematerialisation of shares.

 

"Only in Mumbai this keeps happening. We haven't received such complaints from other centres," sources said. However, they declined to give details over the number of fake certificates the company received or name the broker or sub-broker allegedly involved in the process. The company believes that merely joining the NSDL would not solve the problem unless its members took pain in verifying the validity of every certificate received.

Mico intends to approach shareholders to convince them to dematerialise their shares by surrendering them to NSDL.

The issue of fake share certificates also came up at the AGM of the company in Bangalore recently. At the meeting, responding to a shareholder's question, Hubert Zimmeror, chairman of Mico, said the company plans to join the depository to tackle this.

Although the Securities and Exchange Board of India has advised companies to dematerialise their shares only around 150 firms have so far done so. Mico is listed on Bombay Stock Exchange and Bangalore Stock Exchange.