Sebi yesterday asked the seven group companies to submit to it their plans on alternative arrangements for the shareholders in case of either a suspension or a cancellation of licence. The decision to either suspend or cancel the licence of Reliance Consultancy Services, registrar to the group, does not seem to be an easy one for the regulator as was made out to be earlier.
The seven Reliance group companies, who are RCS' clients, would have to submit their plans by next week to Sebi. This was decided after a meeting between the companies and Sebi chairman D R Mehta.
Business Standard yesterday reported that Sebi had called a meeting to decide on such alternatives. However, despite the discussions, all the possible alternatives before Sebi seem to be equally tricky and having a major ramification on the entire stockmarket.
Any Sebi action would, necessarily, have to give some time to Reliance group companies to move to other registrar companies.
The fact that Sebi has to ensure that all the Reliance shareholders are in no way harmed on account of either suspension or cancellation is the reason why Sebi appears to be vacillating on the issue.
A major point which has emerged is that Sebi can take action only on the Andheri unit of RCS, which handles the Reliance Industries work, and not the Chembur unit, which handles the registrar work for the remaining Reliance group companies.
This itself would be a major decision, but would restrict the repercussions to 26 lakh shareholders of RIL and not 10 million.
Besides, the other major registrar companies also would be facing major problems since they are handling about 45 lakh folios at a maximum, while the shifting of RCS work would mean handling an additional one crore folios.
A section of those watching the RCS drama unfold feels that suspending of RCS' licence would be largely similar in nature to cancelling its licence altogether.
This is so, since a separate arrangement would become necessary even for suspension, and it would be virtually impossible to shift the entire work back to RCS once the suspension is over. This would be ridiculous and cumbersome, a source said.
Setting up in-house share transfer cells by each of the Reliance companies, emerging as one of the options at the meeting, is also being ruled out.
Reliance has already decided to join the depository system, and paperwork would also be reduced considerably if all the group companies follow suit.
