The Chandrasekharan panel set up by Sebi to look into smoothening of share transfer mechanism has made a representation to the Department of Company Affairs (DCA) seeking exemption from the mandatory approval of board for transfer of small quantities of shares.
Sebi chairman D R Mehta, on the other hand, has asked registrars to conduct themselves properly or face tough action by the regulator. He warned them when he met the top 15 registrars at a meeting organised by Sebi on Friday.
According to sources, the representation was given to T S Krishnamoorthy of the DCA. A member of the Chandrasekharan committee said at present, even for transfer of shares of small quantity there is a need to seek an approval of the board of directors of the company. We want the government to do away with that as this is one of the main reason for delays in share transfer.
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The source also said that companies can delegate the responsibility required for share transfer to officers in the company. Added the source this is essential so that such transfers can be quickly disposed off. This is possible only through an amendment in the Companies Act.
The main point made by the registrars and transfer agents is the use of hologram bar code method for share certificates. However, even for this purpose there is a need to seek amendments in the Companies Act. Mehta told registrars that there was a need to bring down delays in share transfers and said the regulator will not tolerate any lapses on the matter.
A Sebi source said that investigations conducted by the regulator revealed that a big R&T agent (name withheld) has been furnishing false certificates to investors and to Sebi and soon action will be taken against such miscreants.