INTERIM ORDER IN RESPECT OF CAMEO CORPORATE SERVICES LIMITED

Ex parte ad interim order in the matter of Cameo Corporate Services Limited.

WTM/AB/SEBI/SRO/29/ 2019-20

SECURITIES AND EXCHANGE BOARD OF INDIA CORAM: ANANTA BARUA, WHOLE TIME MEMBER EX PARTE–AD-INTERIM ORDER

UNDER SECTIONS 11, 11(4) AND 11B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 AND REGULATION 22 OF THE SEBI (REGISTRARS TO AN ISSUE AND SHARE TRANSFER AGENTS) REGULATIONS, 1993.

IN RESPECT OF:

Noticee Noticee Name CIN No. 1 Cameo Corporate Services Limited U67120TN1998PLC041613

1. The Securities and Exchange Board of India (hereinafter referred to as “SEBI”) received a complaint dated May 14, 2019, from Mr. Sudarshan Mundra (hereinafter referred to as “the complainant”) on SCORES, an electronic platform provided by SEBI for lodging of complaint by the investors. The brief of the contents of the complaint are as under:

(i) That the complainant is a legal heir/beneficiary of Late Sewratan Mundra, his paternal grandfather, who expired on May 15, 1975. He was unaware about the existence of shares held by his grandfather. There was a massive fire damaging all their documents in 1995 and the remnants and files were dumped in their warehouse and left unattended. Only recently, when they were clearing and sorting of the old documents, they discovered certain shares of Indo National Limited held by his Grandfather;

(ii) That the complainant had applied to Cameo Corporate Services Ltd (hereinafter referred to as “Cameo”/“Noticee”/“the RTA”), the Registrar to the Issue and Share Transfer

Agent (SEBI Registration No. INR000003753) of Indo National Ltd., seeking information on transferring the said shares along with the bonus shares accrued to his name, as the legal heir. RTA replied to him that the said shares had already been transferred to one Mr. Sewratan Mundra of 68/40, M. B. Sarani, near Rajat Apartment, Kolkata – 700 040. That Mr. Sewratan Mundra fraudulently applied for and received, the duplicate share certificates in 2015 based on a change of address proof letter and subsequently, sold them to one Mr. Anil Kumar Shivratan Bhootra from Kolkata. That upon the request made by the complainant, Cameo had given him the photocopies of the papers submitted by the aforesaid Mr. Sewratan Mundra, for his application for issue of duplicate share certificates to the RTA and also the share transfer deed duly executed by Mr. Sewratan Mundra;

(iii) The complainant questioned, the due diligence exercised by the RTA in verifying the genuineness of the request received for change in address and for duplicate shares, from the person claiming to be Sewratan Mundra. The complainant also alleged that PAN Card used by the person called as Swetaratan Mundra shows his date of birth as November 12, 1961 to establish his Proof of Identity. The complainant stated that he had provided proof to the RTA establishing that his grandfather was passed away in the year 1975 and was born much before 1935. As a proof of existence of his grandfather before 1961, the complainant had provided certain documents to RTA;

(iv) The complainant requested SEBI to investigate the entire matter and to take up the issue with Indo National Ltd. and the RTA and direct the company or the RTA to cancel the issue of such fraudulently obtained duplicate share certificates in the year 2015 by the imposter Sewratan Mundra (hereinafter referred to as “claimant“), take steps to issue fresh Share Certificate for 600 shares against the said Folio to him along with all the benefits accrued from 1973 onwards and to compensate him as a legal heir for all or any losses suffered by him on this account.

2. The aforesaid complaint of the complainant, as received on the SCORES, was replied to by the RTA vide its reply dated June 07, 2019. Consequently, the aforesaid complaint got disposed of on the SCORES inter alia informing the complainant that if he is not satisfied with the explanation of the RTA of the company, he may approach appropriate legal forum as the title on the shares has to be decided. Subsequently, the complainant made another complaint dated June 10, 2019 on SCORES wherein he reiterated his earlier allegation of failure to exercise due diligence by the RTA and requested SEBI for detailed examination of the matter.

3. Thereafter, SEBI undertook the examination of the activities of the RTA with specific reference to the issue of exercise of due diligence in respect of duplicate shares issued in the case of complainant. On the basis of the documents provided by the RTA in the matter, it was observed as under:

(i) The company, Indo National Ltd. had appointed the RTA as their Registrar from March 30, 2000 for only electronic connectivity (Demat) and the physical transactions were processed by the company in-house; (ii) From March 26, 2012, the company had appointed the RTA, as their Share Transfer Agent for physical transactions also. As per the handing over report of the company dated April 02, 2012, the signature pertaining to past and present shareholders pertaining to physical and shareholders master and dividend master made are handed over to RTA; (iii) Since, there is no specific regulation/circular for processing request for change of address by shareholder, the RTA stated that they update the same based on the request received from the shareholder along with address proof, if signature is matching. Wherever signature is not matching, they insist for bankers' attestation along with the address proof to process the request; (iv) The RTA had received a letter from a person claiming to be Mr. Sewratan Mundra on August 04, 2014 intimating change of address and requesting for unpaid dividends. Mr. Sewratan Mundra had attached self-attested photocopy of electricity bill from CESC Ltd. for April, 2014 along with a copy of PAN card bearing no. CVEPM6188S. Based on the same, request of Mr. Sewratan Mundra for change of address was accepted by the RTA vide letter dated August 16, 2014 and also provided details of the unpaid dividend in the Folio vide letter dated August 28, 2014. Based on the request received from said Mr. Sewratan Mudra subsequently, Cameo confirmed change of address and gave procedure for issuance of duplicate certificate including details of distinctive number and certificate numbers on September 20, 2014;

(v) The RTA had received request for issuance of duplicate share certificate by the said person on November 10, 2014 along with notarized indemnity bond, notarized affidavit, copy of PAN card, copy of electricity bill, copy of Police complaint made in Kotwada Police Station; (vi) Newspaper advertisement for loss of share certificate was published on November 17, 2014 and the RTA vide its letter dated December 18, 2014 issued duplicate certificate to the claimant; (vii) Subsequently, these duplicate shares were lodged for transfer on January 09, 2015 in prescribed format ("SH-4") by one transferee named Mr. Anil Kumar Shivratan Bhootra (PAN AJDPB9266D) along with copy of PAN of the transferor and transferee and shares were dispatched to transferee on January 12, 2015 after transfer; (viii) These shares were lodged with Sharekhan, a depository participant (DP), for dematerialisation, on February 05, 2015. As a result, same were dematerialized and credited to client ID no. IN300513 21566979 of Mr. Anil Kumar Shivratan Bhootra; (ix) Though the RTA had responded to the compliant that the signature of person claiming to be Mr. Sewratan Mundra mismatched with their records and they had obtained address proof from him, however, in its reply to SEBI, the RTI stated that they were not in possession of the specified signature of the said investor.

On seeking clarification regarding the same, they have stated that before notification of SEBI (LODR) Regulations, 2015 (LODR Regulations), there was no procedure for signature not available cases. The requirement to obtain Banker's attestation in case of signature mismatches/non-availability of signatures was specified only through LODR regulations, which was notified on September 2, 2015. Before the same, they were communicating to the shareholders as signature mismatch in the case of non-availability of signature with them, as the shareholders will not provide additional documents for signature not available, in the absence of specific regulation. Hence, they had stated in the ATR as "signature mismatch"; (x) Though RTA has obtained other prescribed documents, considering the fact that the complainant was holding the original share certificate and considering the deficiency on the part of the RTA in verification of change of address request in the instant case, as the folio number mentioned in the initial letter requesting for change of address was mismatching with the original folio number of the shareholder and RTA has not obtained

Banker's attestation for the specimen signature of the claimant, the RTA was advised to take steps to restore the shares and corresponding benefits to the complainant Mr. Sudarshan Mundra, after verifying his claim, i.e. if the complainant could produce certificates regarding his succession/legal heir to the concerned shareholder.

4. However, considering the complainant statement that his grandfather had expired in 1975 and his possession of original share certificate, it was observed that the claimant of the duplicate share certificates may be a person impersonating as his grandfather. To examine similar such cases, details were sought from the RTA relating to the cases in the said company (Indo-National Limited) from Financial Year 2014 onwards wherein they had received requests for duplicate shares and transfers of shares, etc. On examination of details furnished by the RTA, it was noted that claimants had requested for duplicate shares and had lodged them for transfer subsequently (except transfers between joint holders) in the following cases: Table - 1 Name of the Original Shareholder for whose PAN of the shares, duplicate shareholder as shares were obtained provided in the by alleged copy lodged by PAN of the Folio No. impersonators Transferee Transferee Transferee A0000054 Ajit Kumar Pal CQSPP0431N Kadia Dinesh DFQPK0416A Kuvarjibhai B0000184 Bheemchand BELPJ5265C Varsha Dinesh AFFPV5427C Amarchand Jain Varu G0000022 Gangaikondan Subbier BNAPG1924R Kadia Dinesh DFQPK0416A Ganapati Kuvarjibhai J0000391 Vaijayanthi Jayant GHVBJ0189A Anil Kumar AJDPB9266D Altekar Bhootra K0000130 Kanti Lalchand Ajmera BMCPA4004R Kishorbhai ALVPK8070G Premjibhai Kacha L0000012 Lachminarain Poddar DEMPP4282J Dinesh K ACDPV0132F Varu R0000034 Radhakrishnan EPOPK8928A Varu Dinesh AUCPV4629A Khandelwal K S0000162 Sewratan Mundra CVEPM6188S Anil Kumar AJDPB9266D

Shivratan Bhootra R0000457 Rohini Popatlal Parikh MBEWP2063R Bhanuben B BBNPG0822K Galsar

5. On further examination of documents pertaining to above cases, following discrepancies were observed: a. The photos in the copy of documents submitted as proof of identity and proof for address for the different claimants found to be identical. b. Transferees were having more than one PAN with different combinations of middle names and surnames. c. Following modus-operandi was observed in all these cases:

i. a request for change of address was sent by the claimants by providing a copy of PAN stating to be in the name of the original shareholder; ii. thereafter a request for issue of duplicate share certificates was made; iii. after receipt of the duplicate share certificates, the said shares were lodged for transfer in the name of the Noticees; iv. then Noticees dematerialized these shares and sold these shares in the market.

6. Considering the fact that claimants are not original shareholders, but some persons alleged to be impersonating as original shareholders, and transferees who had lodged the shares for the transfer, would be the ultimate beneficiary in such cases, documents relating to transactions from financial year 2014-15 in all the companies who are the client of the RTA, involving the persons mentioned in Table -1 were sought and it was found as under:

Table – 2 Name of the Original Shareholder for whose Name of the share, duplicate shares Folio Number company were obtained (“hereinafter PAN of the collectively referred as Transferee Transferee claimants/impostors”) Bannari Amman Chandru Paramand Kadia Dinesh C0003032 Sugars Ltd Nanadwani Kuvarjibhai DFQPK0416A MPS Limited Sanjiv Shah 90100612 Varu Dinesh K AUCPV4629A Nikhil Wagle and 90100118/ Bhanuben B BBNPG0822K MPS Limited Pramila Wagle 90101037/90101039 Galsar Aban Kadia Dinesh Yudhistrarlal Wadhwa 4831 Offshore Limited Kuvarjibhai DFQPK0416A Initial Transferee: Bhanu Kumar Vasant Doshi Aban Offshore Harish Kumar Jajodia (BEJPD5652M) Limited Initial Transferee: Dinesh Kunvari 1226/5679/5680 Bhai Varu ACDPV0132F Aban Offshore Dinesh Kunvari Angelique k Singh Limited A 0000027 Bhai Varu ACDPV0132F

7. On analysis of the cases mentioned in table 1 and 2, following discrepancies were prima facie observed:

a. Photocopies of the PAN produced by claimants and transferees to Cameo stating to be the PAN of original shareholder, for obtaining the duplicate shares and for transferring it in their name are fake and does not exist as per income tax website b. One of the Transferee - Dinesh Varu Kanvurjibhai is having multiple PAN in different combination of his middle name/surname and had operated various Bank Accounts and Demat Accounts on the basis of the said PANs c. Photos in PAN/address proof submitted by different claimants/impostors are identical indicating that the documents are fake d. Bankers attestation submitted for specimen signature of the original shareholders are fake, which is confirmed by the Banks e. Irrespective of the address/location of the original shareholders, the new address provided by the claimants are nearer to the address of the noticees f. Irrespective of the address/location of the original shareholders, Police Station in which the complaint regarding loss of share certificates stated to be made by claimants/impostors are same and certificates claimed to be issued by the concerned Police Stations are found to be fake as no such police station exists g. The drafting of the letters received from the claimants/impostors claiming to be original shareholders is similar in some instances h. Some of the noticees are known to each other through off-market trades. Further, all the noticees are located in Ahmedabad and it appears that a few of the them are located nearby to each other

8. On analysis of the cases mentioned in Table 1 and 2, it is prima facie observed that the RTA has not exercised proper due diligence while processing various requests received from the claimants/imposters as alleged herein above. The discrepancies prima facie observed on the part of the RTA are mentioned below: a. Despite observing the mismatch in signature, the RTA has not done additional due diligence b. The RTA has failed to detect that one of the noticee - Dinesh Varu Kanvurjibhai has submitted multiple PAN in different combinations to process various requests c. The RTA has failed to detect that photos in PAN/address proof submitted by different claimants/impostors are identical indicating that the documents are fake d. The RTA has failed to detect that irrespective of the address/location of the original shareholders, the new address provided by the claimants are nearer to the address of the notices e. The RTA has failed to detect that irrespective of address/location of the original shareholders, Police Station in which the complaints regarding loss of share certificates has been lodged are same f. The RTA has not done additional due diligence w.r.t to verification of PAN numbers from Income tax website or any other database despite the shares and dividend were in the nature of unclaimed g. In one instance, the RTA has changed the address without obtaining the proof of address

9. In view of the above observations, it is observed that the Noticee has prima facie failed to exercise due diligence and has thus prima facie violated Clauses 2, 3 and 16 of Schedule III of Securities and Exchange Board of India (Registrars to an Issue And Share Transfer Agents) Regulations, 1993.

10. Under the above circumstances, I, in exercise of powers conferred upon me under sections 11(1), 11(4) and 11B read with section 19 of the SEBI Act, 1992 and Regulation 22 of the SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, by way of this ex parte-ad-interim order, hereby prohibit the Noticee from accepting fresh clients in respect of its activities, as defined under Regulation 2(g) and (f) of the SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, till further directions.

11. In view of the prima facie finding, regarding impersonation by certain persons as the genuine shareholders, for getting the duplicate shares issued, the actual shareholders are at liberty to approach appropriate authorities under provisions of Section 419 of Indian Penal Code, 1859 and Section 38 (Punishment for personation for acquisition, etc., of securities) of the Companies Act, 2013.

12. The present order has been passed under disciplinary proceedings against the RTA for the failure to exercise due diligence which is in violation of the Securities Laws, as mentioned in the order above. SEBI cannot adjudge private disputes or claims or counter claims as held by Hon’ble Securities Appellate Tribunal, Mumbai in Ibrahim Ahmed Vs. SEBI (Appeal No. 40 of 2009), MCS Ltd Vs. SEBI (Appeal No. 107 of 2008) and Hameed Ullah Lalji alias Tony Ullah Vs. SEBI (Appeal No. 123 of 2008). The observations in this order does not ipso facto entitle any shareholder of the client company of the RTA to claim their securities, which claims are to be taken up by such shareholders before appropriate forum.

13. The findings recorded against the RTA, in the order, are based on the prima facie examination of facts and prima facie violation of law.

14. The Noticee may file its objections, if any, within twenty one (21) days from the date of receipt of this Order. The Noticee is directed to submit its reply along with the supporting documents. In the event the Noticee intend to avail an opportunity of personal hearing, it may appear before the Securities and Exchange Board of India at its Head Office at SEBI Bhavan, Plot No.C4-A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai-400051 on November 18, 2019. In the event of the Noticee failing to file replies within 21 days of receipt of this order or failing to appear before SEBI on the aforesaid date and time, the prima facie findings made against the Noticee in the present order, shall be deemed to be confirmed against the Noticee automatically, without any further orders.

15. This order shall come into force with immediate effect. A copy of this order shall be forwarded to all the Stock Exchanges, Depositories and Registrar and Transfer Agents to ensure that the directions given above are strictly complied with.

Sd/ Place: Mumbai ANANTA BARUA Date: October 18, 2019 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA