Sharepro fraud: Sebi tells cos to do audit before naming new RTA

Santosh Nairmoneycontrol.comThe Securities and Exchange Board of India (SEBI) is learnt to have informally directed the clients of scam-tainted share transfer agent Sharepro Services to conduct a forensic audit of their shareholder records before appointing a new registrar.Three firms--Asian Paints, Aptech and Britanni--last month filed criminal complaints against top officials of Sharepro alleging theft of shares and dividend belonging to bonafide shareholders. The fraud was committed by some Sharepro employees by forging signatures, and opening fake demat and bank accounts. The Hindu newspaper has reported that two more companies have complained to the Economic Offences Wing alleging theft of shares. Around Rs 18-20 crore shares of Britannia are learnt to have been fraudulently transferred and around Rs 2 crore of Asian Paints shares.Industry sources say the size of the scam is likely to be much bigger as many companies are yet to conduct an audit of their shareholder books.Also read: Fraud share transfer game may be bigger than 2005 IPO scamAccording to details on the Sharepro website, over 200 companies are employing the services of the share registry firm.Soon after the fraud surfaced, Sharepro Managing Director GR Rao sent a mail to clients (a copy available with moneycontrol.com) proposing that their records would be handled by Link Intime India.“In view of the same and in order to ensure a smooth transition and to lend continuity of services, Sharepro has decided to work out a solution by which M/s. Link Intime India Pvt Ltd., a leading share registry company based in Mumbai, takes over the registry operations,” said the mail from GR Rao.But sources say SEBI was not comfortable with this abrupt changeover and wanted companies to ensure that the shareholder records were in order before the handover to a new registrar.Link Intime has denied that it was planning to take over the clients of Sharepro.“We wish to confirm that at we have not at any point of time entered into any contract / arrangement with Sharepro,” Link Intime Managing Director MV Ramnarayan said in an e-mail response to a query by moneycontrol.com“Link Intime’s help was sought by Sharepro on the day SEBI passed its order. This was an unprecedented situation and we offered to help out in finding a solution to enable a proper transition and least disruption to investors / corporates. So we explored various possible solutions. However, at no point of time did we intend to acquire Sharepro,” the e-mail said.Asian Paints has appointed TSR Darashaw as its new registrar in place of Sharepro. Colgate Palmolive has replaced Sharepro with Link Intime as its registrar.