This happened to Gurdip Singh, a Delhi based senior citizen, who ended up having to approach a consumer court and fight a four year battle, including one appeal just to get his physical shares of Mahavir Spinning Mills Ltd dematerialised. An original allottee of Mahavir Spinning shares, he decided to get his shares dematerialised in 2002.

His DP (depository participant), Standard Chartered Bank said the request was turned down due to “signature mismatch” and he would need to get it verified by the bank.

On complying with this, the company still rejected the demat request.

On writing to the company, it asked him to sign an affidavit in a specified format, but it rejected the demat request again. It now wanted the affidavit attested by a first class magistrate, because by now, in the process of going back and forth, the shares had been stamped for demat without actually being dematerialised. The State Consumer Forum noted that the company and its agent (Allankit Assignments Ltd) were making up rules, like asking for attestation by a magistrate, even when there was no such legal requirement.

The Forum not only ordered the company to dematerialise Mr Singh’s shares, but decreed payment of a compensation of Rs 3,000 for loss of profit during the period and a compensation of Rs 1,000 for mental agony and harassment. A pertinent question raised by Singh’s experience is, why couldn’t this problem be resolved through Sebi?

Clearly, even one experience like this is enough for a retail investor to keep away from the capital market altogether.

... contd.