A 74-year-old man from Kochi who invested in an unlisted company over four decades ago is fighting the battle of his life to claim his stake worth over Rs 1,400 crore.
In 1978, Babu and four close family members had bought a 2.8 per cent stake in Udaipur-based Mewar Oil and General Mills Limited. The company was unlisted at the time.
The company grew over the years and the promoters changed its name to PI Industries. It is not only listed on the stock markets but is performing rather well with a market capitalisation of nearly Rs 50,000 crore.
With the company’s growth, the value of Babu’s investment in the company has jumped substantially. Each share of the company was trading at Rs 3,245 on the Bombay Stock Exchange (BSE) at Monday closing. Babu’s 2.8 per cent stake in the company roughly translates to 42.48 lakh shares.
Babu George Valavi was associated with Mewar Oil and General Mills (Now PI Industries) as its sole distributor for almost a decade in the late 1970s and early 1980s. As the company’s operations grew, he became the company’s clearing and forwarding agent (C&F) for pesticides product for Kerala and Tamil Nadu.
Babu’s late brother George G Valavi was a prominent businessman who was engaged in the shipping business. He and the founder-chairman of PI Industries knew each other and ultimately became family friends.
It was due to this connection that Babu George Valavi became a distributor for the company’s product in South India.
Babu also bought shares of the company during that period and kept the certificates safely in his cupboard. He did so because the shares of the company were unlisted at the time and were not traded.
COMPANY DISCREDITS STAKE OWNERSHIP
Babu George Valavi had literally forgotten about the investment. It was only in 2015 that his son discovered that PI Industries was a listed company and approached the company’s registrar to deposit the physical share certificates in a demat account. Karvy Consultants was the register of PI Industries.
In 2015, his son started managing activities and when he found the share certificates, he approached Karvy Consultants to demat after finding that the shares are listed But Karvy Consultants asked Babu’s son to contact the company. The company informed that the shares had been transferred to other people in 1989.
Later, the company informed them that shares were transferred to other people in September 1989. He also confirmed that the original share certificates are safe in the family’s custody. However, the company’s secretary informed that Babu’s son that they were issued duplicate shares and added that the company has transferred the shares to other persons in September 1989.
A year after the claim was made in 2015, PI Industries sent its then director and now joint managing director Rajnish Sharma along with the former general manager to meet with Babu in Kochi and settle the issue after verifying the original share certificates.
Babu said the top officials had confirmed that the certificates were genuine and that they will discuss the matter with the chairman. However, no action was taken by the company and even the chairman was “evasive” in his reply when contacted.
POSSIBILITY OF FRAUD
After receiving no response from the company, the family had even approached the stock market regulator Securities and Exchange Board of India (Sebi). However, in response to Sebi’s query, PI Industries maintained that the shares were transferred to other persons in 1989.
Babu also suspects the possibility of fraud involving some senior officials who could have transferred the shares without the knowledge of the company’s top management. He also said that Sebi has not yet closed the investigation and remains hopeful.