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Kochi bizman waiting for SEBI to settle his dispute with PI Industries

Thiruvananthapuram, Sep 24 : Babu George Valavi, 73, a Kochi-based businessman, and his four close relatives had brought 3,500 shares of Udaipur-based Mewar Oil & General Mills, an unlisted company that was making edible oils at that time.

This was in 1978 and over the years the company changed its name to PI Industries and expanded its business to chemicals and pesticides manufacturing and it now has a market cap of about Rs 50,000 crore.

The Kochi-based Valavi is now fighting the company to reclaim his stake which has now grown to Rs 1,448.5 crore in the 43 years since he had invested in the company.

Speaking to IANS, Valavi said, "The company has denied our claim and said that it had transferred the shares to other people in 1989."

The Kochi-based investor asked a pertinent question -- how can the company transfer the shares if he had not signed and given the rights as the original share certificates are safe in his cupboard.

When Valavi and his relatives bought the shares, they had got 2.8 per cent stake in the company, and now the ownership of the Valavi family translates to 42.28 lakh shares.

As on Thursday, PI Industries had a market value of Rs 3,219 per share.

Valavi said that he had forgotten about the investment in the company over the years and it was when his son started managing the finances of his business that he found the original shares.

His son approached Karvy Consultants, who are the registrar for PI Industries to Demat their shares.

The Valavi family then contacted PI Industries upon instruction from Karvy Consultants, but to their dismay and shock, they received a reply from the company that their shares have already been transferred in the name of other people in 1989.

"The original share certificates are safely in my home. How can the company transfer the shares to a third party then? There are a lot of discrepancies in this matter and upon enquiry we found that the shares were transferred in the names of 13 people, all natives of Udaipur," Valavi said.

The Kochi businessman said that the sale of their shares, according to company records, was executed on one single day which can never be true as his family members reside in different places.

"The transfer of shares was done by one G.C. Jain, who was the then Company Secretary of PI Industries, and 500 shares were found transferred in the name of one Madhu Jain and the address of that person is the same as that of G.C. Jain. Madhu Jain is either the wife or daughter of G.C. Jain," he said.

Valavi and the other shareholders, including his brothers and sister, are senior citizens and he feels that even after filing a complaint with SEBI six years back, he is yet to get a concrete reply.

The 73-year-old said, "If SEBI, which is considered the last resort of an investor, is not acting on time, what is the point? This will send a wrong message to several investors that SEBI and the Government of India are not acting properly in the matter. I need justice and justice cannot be delayed."

He said the company Chairman had deputed two directors of the company, Rajnish Sarna and C.H.N. Rao, to meet him and they met him and discussed the matter in January 2016 in Kochi. He said that both of them agreed that Valavi's claim was genuine, but even after five-and-a-half years, nothing has happened.

PI Industries entered into a joint venture with Kumiai Chemicals on June 22, 2017. Kumiai Chemicals is a Japanese company and Valavi said that Japanese companies and other European companies will have strict code of conduct for entering into a joint venture like this.

"How can a company like Kuimai, which is a Japanese entity, have a long term association with a firm like PI Industries, which is not disposing of my genuine grievance," he asked.

Valavi and his family members are expecting that justice will prevail and that they would get their due shares even if there is a delay.

He wants the SEBI and the Government of India to meticulously follow the case and provide justice to him so that investor confidence in an agency like SEBI is regained.

Those who are in the know of stock markets said that the puzzle can be solved only when it is understood as to how duplicate shares were issued on the original shares of Valavi and his family members.