The order comes after the SEBI received a complaint from Adesh Kaur against Eicher, alleging that 903 shares of the company, which had been held in her name since 1994-95, had been fraudulently transferred to an account of an impersonator who had managed to forge her signature and change her address from Sangrur (her original address) to Mumbai, and then had duplicate share certificates issued in the fraudster's name in lieu of the 903 s.
According to Kaur's complaint, Eicher and its Share Transfer Agent (STA) — MCS Limited — performed or processed the change of address from Sangrur to Mumbai and the issuance of duplicate certificates without following SEBI requirements or undertaking adequate due diligence.
In its order, the SEBI noted that Kaur had mentioned to Eicher about the fraudulent transfer of 903 shares of the company from her folio in 2013, the value of which was approximately ₹17.52 lakh during the relevant time.
Eicher took steps to compensate Kaur by rectifying its register of members and transferred shares of the company to her demat account in May 2021.
It is noted that the compensation was made by Eicher only after a specific direction was issued by the Supreme Court in July 2018, directing Eicher to rectify its register insofar as the physical share certificates are concerned.
Although the court's direction was issued in July 2018, Eicher compensated Kaur in 2021, almost after three years.
By doing so, it violated the general norms for processing documents.
"The time limit as prescribed under...the Listing Agreement and...the LODR Regulations in the matter of issuance of duplicate shares or new certificates has not been adhered to by the noticee (Eicher)," the SEBI said.
Under the rules, a listed entity is required to issue new certificates in cases of loss or old decrepit or worn-out certificates within a period of 30 days from the date of such lodgment.
"The investor was put to loss as a result of the complete failure on the part of the noticee (Eicher) to exercise the expected level of due diligence and professionalism while processing the request for issuance of duplicate certificates from the impersonators," the SEBI said.
"By aimlessly shifting the responsibility on its agent for the lapses, the interest of the investor has suffered. Clearly, the noticee has failed in its obligation to exercise due diligence, skill and promptitude while handling the complaint or grievance of Adesh Kaur," it added.
(With PTI inputs)
