Mse Drags Sebi, Uti, Datamatics To Court

The Madras Stock Exchange(MSE) has filed a writ petition in the Madras High Court against the UTI, Sebi and Datamatics Financial Services (DFS), the share transfer agent for UTI for the delayed transfer of UTI mastergain units.

According to the petitition filed in the Madras High Court (a copy of which is available with Business Standard), MSE has sought an interim injunction from the court restraining UTI and Datamatics from returning all Master Gain 1992 securities lodged within 30 days from the date of transfer pending disposal of the above writ petition.

The petitioner has requested the court to issue a writ , order or direction in the nature of a writ of mandamus, directing UTI to register the transfer of all Master Gain 1992 Securities within 30 days from the date of lodgement in accordance with section 113(1) of the Companies Act 1956.

 

The controversy started in 1995 when hundreds of MasterGain units lodged for transfer with DFS were returned to investors after a gap of 2-3 years on grounds that they were forged.

In its petition,MSE has stated that UTI has not complied with clause 16 of the listing agreement. The clause states that any company listed on the exchange has to give a declaration at the time of fixing the date for book closure date that all the securities received for transfer one month prior to the date of closure have been duly transferred and despatched to the transferees.

The company also has to give an undertaking that the securities where transfer is pending and other securities lodged for transfer will be transferred and depatched within a period of two months from the date of receipt.

The petition states that UTI has failed to complete the transfer within the prescribed period of one month as mentioned in the listing agreement or to issue the certificate within one month from the date of lodgement.

The MSE has said that in the event of undue delay in registering the transfer of securities which are listed on the exchange, it is under a statutory obligation to consider the grievances of the brokers and sub-brokers dealing with the concerned security and provide remedial measures. However,due to the undue delay in the transfer of shares by UTI and DFS, many MSE members have filed writ petitions for a writ of prohibition restraining MSE from initiating disciplinary action against them. In its petition MSE has stated that Sebi did not take timely action to protect the interests of the investors.

The petitioner states that it was forced to file the writ petition as numerous letters to Sebi and UTI on the issue have been in vain.UTI officials were unavailable for comments. Sebi officials when contacted that they have not received a copy of the petition as of yet.