Reliance Consultancy Services, which was suspended by the Securities & Exchange Board of India with effect from March 5, 1997, for its alleged role in the Reliance Industries share-switch controversy, is unlikely to resume operations.
The certification of registration granted to RCS expires on July 31 this year. Sources in the company said it had been decided not to revive it. However, a Reliance spokesperson declined to comment on the issue.
The redeployment of RCS staff has already begun, with a section of the 400 employees offered employment by Reliance Industries. Another bunch of employees is expected to be absorbed by Karvy Consultants Ltd, appointed by Reliance Industries and Reliance Petroleum as their registrar and share transfer agent. A smaller section has been told to look for other pastures, say sources.
RCS employees said the redeployment started when Sebi issued the suspension order on October 16, 1996. The market regulator had at the time granted Reliance the option to either carry out in-house share transfers or appoint another share transfer agent. The company appealed to the appellate authority against the Sebi order, but the appeal was turned down.
Reliance Industries and Reliance Petroleum have now appointed Karvy Consultants as their registrar and share transfer agent. Initially, when the Sebi suspension order against RCS was upheld by the appellate authority, Reliance Industries had announced that all registration and transfer work for the company would be done in-house.
Explaining the move to appoint Karvy, sources said: It would be better to commence share registrar work on a clean slate with a fresh agency, particularly since the operations for a company like Reliance Industries will involve full-time involvement.
Karvy Consultants, which was promoted in 1982 by a group of Hyderabad-based chartered accountants, is the countrys largest Category-I registration and transfer agent. It has a staff strength of 1,600 and a network spanning 58 countries.
A Reliance spokesperson was confident Karvy will be able to service Reliance Industries and Reliance Petrochemicals family of over 90 lakh domestic and international investors. By appointing Karvy Consultants as its registrar agents, the Reliance group has become the first major Indian group to implement Sebis thinking that companies should have an arms length relationship with the registration and transfer agents, the spokesperson said.
