Many in Parekh’s position would have been thrilled at the bonanza, sold the shares, pocketed the money and even closed the DP account and waited for someone to detect the mistake. Instead, he has been chasing his DP and registrar for six weeks to rectify the problem and transfer the shares. We got to know the case only because when he was tired of being given a run-around whereas he should rightfully have received a Thank You and an apology from the DP and Registrar.

The flip side of this is that another investor, who actually applied for Parasvnath shares is surely running around for the last six weeks agitated at the loss of Rs 18,000 and also not getting any response from those responsible. What is the point of multiple identification systems if key information can be messed up so much? And what if a similar mistake had led to the debit of a large sum of money from Parekh’s account rather than a credit of 20 shares that are being traded at a substantial premium?

A serious problem today is the lack of a clear line of accountability between companies, depositories, stock exchanges and the Securities and Exchange Board of India (Sebi). Each one of them treats grievance redressal like a post office and merely transfers complaints instead of understanding issues. For instance, Madhav Parekh’s case is less about the 20 shares credited to his account and more about the lack of robustness of the IPO process. But how does an investor even get the attention of the top brass in the organisations responsible for the job? Such weaknesses ultimately lead to bigger scams. Fortunately, the automated system works well most of the time, but if you are the unfortunate victim of a mix up or callous intermediaries, life can be extremely tough.

... contd.