Tue, 7 Jul 2009
You are here: IE »   Story

Harried investors finally get a helpline in Midas Touch

AddThis

After a series of raps from market regulator Sebi and investor groups, the government has finally decided to clear the blur over how individual investors can defend their rights in India.

Starting September, ordinary investors will be able to file their grievances against companies, listed or unlisted, over the Internet. This using a new ‘Investor Helpline’ being set up by Midas Touch, a 10-year-old investor justice association.

The entire project is being funded by the government, including running expenses of Rs 25 lakh a year, all of which comes from the Investor Education and Protection Fund (IEPF), whose estimated corpus of Rs 300-400 crore is managed by the Ministry of Company Affairs.

Following MCA-21, the Ministry’s e-governance project under which all companies will register and file returns online, the new website will allow all grievance redressal mechanisms of the MCA, Registrar of Companies, Sebi as well as the RBI function online.

Thousands of such complaints are said to be registered everyday by investors in India, according to recent surveys. Daily, around 500 complaint letters from investors are received by the Ministry of Company Affairs alone. The government is also mulling over plans to use Investor Helpline as a source of crucial data related to companies, mutual funds, non-banking financial institutions and their investors, so that the government systemic errors can be traced and resolved.

“This is the first single-point dedicated website that will handle investor grievances administered by the Sebi RBI and MCA. We should be up and running by early September, nearly three years after we first thought of the project,’’ says Virendra Jain, Director, Investor Helpline.

Some of the problems investors face are also somewhat unique to India, such as companies that ‘vanish’, while others relate to not receiving deposits, refunds, share certificates or bond debentures at all or on time. According to Jain, another problem is that companies change their name but fail to inform shareholders. At last look, Midas had found nearly 3,000 of India’s roughly 9,000 listed companies had changed their names in about the last decade.

“There are 7 lakh total companies registered in India, can you imagine the problem investors face when these companies also change their names?’’ says Jain. While all these kinds of complaints will be accepted by Investor Helpline, it will also help gather and crunch information that the government can use to better frame policies that will help investors.

All complaints registered on the website will be acknowledged, another contrast with the situation today, since investors ordinarily do not know if written complaints have been received by the correct agency. Investor Helpline will also officiate as the agency to forward these to the right place: Sebi, RBI, MCA or ROC.

Express Specials

Be the first to comment.

Post a Comment
Name:
Email:
Title:
Maximum characters allowed     
Comment:
TERMS OF USE:
The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).
I agree to the terms of use.