sebi:WTM/GM/MIRSD/MIRSD3/12321/2021-22

SEBI · SEBI · 1994-10-11 · G. Mahalingam, Whole Time Member

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Censure and warning; DA recommendation of prohibition from taking new assignment for 6 months not accepted

Provisions invoked

• s. 19
• s. 12(3)

Regulations

• Reg. 13
• Reg. 201
• Reg. 28
• Reg. 27
• Reg. 27(5)
• Reg. 28(1)
• Reg. 25(1)
• Reg. 40(7)
• Reg. 14(3)(c)
• Reg. 23(b)

Parties

• Link Intime India Private Limited

Holding

The Noticee violated Regulation 14(3)(c) read with RRTI Circular No.1 (94-95) dated October 11, 1994 by not maintaining specimen signatures, and violated Point 3 of the 2001 Objection Norms and Clause 3 of the Code of Conduct by processing transfers without objection memos, for which it was censured and warned instead of being debarred from new assignments for six months.

Full text

___________________________________________________________________________ Order in respect of Link Intime India Private Limited Page 2 of 40 STA activities was carried out on September 02, 2015. The findings of the inspection were as follows: Specimen Signatures:

___________________________________________________________________________ Order in respect of Link Intime India Private Limited Page 3 of 40 specified by the Board for carrying out the activities as share transfer agents. By not maintaining the specimen signatures, the Noticee had failed to adhere to the above requirements. Transfer Requests processed without possession of specimen signatures: (c) During the inspection period, the Noticee received 1,02,706 transfer requests. On the basis of sampling, two companies, viz. Bharat Gears Limited (Bharat) (604 transfer requests) and GEI Industries Systems Limited (GEI) (12 transfer requests) were shortlisted. Out of this sample, 122 and 12 transfer requests of Bharat and GEI respectively were checked by the inspection team. (d) In respect of samples pertaining to Bharat, it was observed that out of 122 transfer requests, 119 were processed and 3 were rejected for various

___________________________________________________________________________ Order in respect of Link Intime India Private Limited Page 4 of 40 signatures and without making any further checks on the genuineness of the transfer requests. It also tried to complete its records by scanning signatures at a later stage, probably to avoid any regulatory scrutiny. The alleged presentation of such records to the inspection team as genuine records amounted to misleading of the inspection team which is a violation of the provisions of Clause 1 of the Code of Conduct prescribed under Regulation 13 of RTA Regulations. Also, since the Noticee had submitted two different sets of specimen signatures for the same sample, it is alleged that the Noticee had not exercised due diligence, not maintained high standards of integrity in the conduct of its business and has not fulfilled its obligations in an ethical and professional manner, thereby violating Clauses 2 and 3 of the Code of Conduct. (e) The figures mentioned above were only for one client-company which was chosen during sampling out of total 1,036 listed companies handled by Link Intime and that too in respect of 122 transfer requests shortlisted as a sample out of total 604 transfer requests received in respect of the said one client company. Thus, it was observed that 40% of the total transfer requests received in the scrip of Bharat Gears Ltd. were processed by the Noticee without possession of specimen signatures of the transferors

Source: SecMarx — sebi:WTM/GM/MIRSD/MIRSD3/12321/2021-22. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.