The Hindu Business Line : HLL gears up to tackle investor service glitches

HINDUSTAN Lever Ltd (HLL) has started working on an exercise to solve what have collectively snowballed into a major issue for India Inc - problems associated with investor servicing. The company has mandated its registrar Karvy to line up a special programme for investors.

In the background is a series of factoids showcased by HLL: As many as 7,500 dividend warrants are returned undelivered on an average; unclaimed dividends to the tune of Rs 70 lakh are transferred to Investor Education & Protection Fund; and investment in HLL shares of over Rs 20 crore in market value is locked up in long-pending disputes.

Such details have been sent to HLL shareholders along with the company's latest annual report, complete with an explanation that these have primarily originated because of "large incidents of fraudulent interception and encashment of dividend/bonus/interest warrants." These incidents, HLL has claimed, occur despite efforts to curb them by bolstering its internal systems and working closely with the postal department.

Karvy has agreed (as a `special gesture') to provide demat services to HLL shareholders at concessional rates. The counter, incidentally, is traded on the exchanges in the compulsory demat mode and the company has advised shareholders to demat their holdings to facilitate liquidity.

HLL has listed a number of dos and don'ts as well for shareholders, who have been advised not to write to investor service departments in Kolkata, Chennai and Belapur, as service functions at these places have been wound up.

They have also been asked to exchange old certificates of merged entities — Tomco, Brooke Bond Lipton and Pond's - and old HLL certificates of Rs 10 face value for new, sub-divided ones of Re 1 each.

Further, investors have been advised to encash dividend warrants promptly for avoiding revalidation or loss in transit.

The company has also given shareholders an option to receive annual statements in an abridged form. In fact, they have to fill in a special form and send it to HLL to receive the full report and accounts.

Currently, all companies are legally required to supply complete copies of balance sheets, profit and loss accounts and directors' reports.

HLL has referred to feedback verbally given at annual general meetings by some shareholders, requesting it to reduce the cost on detailed statements. It has added that an abridged report will be sent in future unless the shareholder concerned elects or opts to the contrary. He or she will be free to change the option at any point.

The four options given by HLL are: an abridged copy, a full copy, access through the HLL Web site and an e-mailed copy.

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