Even as the Securities and Exchange Board of Indias (Sebi) judicial proceedings on demat irregularities in Parsoli Corporation continues, it has cancelled the registration of its share transfer agent - Pinnacle's shares registry, reports Priyal Guliani.
It is a very crucial case. Judicial proceedings in Parsoli Corporation have been going on as you mentioned and essentially there has been demat irregularities in the shares of Parsoli Corporation where allegedly the genuine shareholders have been transferred to promoter entities or promoter groups and fronting entities.
According to Sebis investigation, 450 cases of these have been found. Pinnacle has been the share transfer agent of Parsoli.
Sebi's order is on Pinnacle and right now it has cancelled the registration of its share registry. It has asked Pinnacle to wind up its entire business by February 2010.
What Sebi says is that Pinnacle did not take the records of signature cards. Throughout this, Parsoli Corporation carried out the verification of signature cards and as a result anything which was regard to the demat request was based on the confirmation of Parsoli Corporation.
As a result it did not fulfil its fiduciary responsibility. Sebi says that Pinnacle is guilty of criminal gross negligence and also is guilty of delaying demat request and misleading demat request on all these grounds, so clearly a very important order here coming in from Sebi.