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Our Bureau

Kolkata , March 15

YEARS after it went under, Prudential Capital Markets, the stockbroker Vinod Baid-promoted investment company, has been slapped with a fine of Rs 10 lakh by SEBI.

The regulator has in an order referred to a violation of section 15C of the SEBI Act and charges established against the company, which has failed to redress grievances of investors - a default that is in fact continuing till date. The penalty will have to be paid by the official liquidator (OL) appointed by the Calcutta High Court from the company's reserves.

Prudential had become a household name among investors, especially in the East, thanks to its activities in the capital market and efforts at garnering funds from investors. The company went into liquidation in late 2001 and the Calcutta High Court appointed an OL pursuant to its winding up.

Complaints against Prudential: The SEBI order has listed 424 complaints against the company. These are as follows: 21 complaints in the Type I category, five in Type II, 94 in Type III, 284 in Type IV and 20 in Type V.

Type I relates to non-receipt of refund order/allotment advice, cancelled stock invest, refund order sent for revalidation etc.

Type II concerns non-receipt of dividends, while Type III relates to non-receipt of share certificates. Type IV complaints arise mainly in case of non-receipt of debentures.

Type V concerns non-receipt of letter of offer for rights and non-receipt of interest on delayed payment of refund orders.

Some of the nearly 300 Type IV complaints are pending redressal since May 1997, SEBI has stated, adding that Prudential had raised loan capital in the form of debentures from investors. It did not repay them and did not send the interest on time; in other cases it failed to send debenture certificates to investors after transfer, splitting or endorsement.

The investors concerned suffered monetary losses due to its failure to repay debts.

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