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Shareholders of Essar Steel, now owned by ArcelorMittal, were in for a rude shock when they found their shares have been moved out of their demat accounts without any intimation either by the company or broking firms.
G Rajaraman, an investor with 100 unlisted shares of Essar Steel for the last five years, had welcomed the ArcelorMittal, the world’s largest steel firm, and Japan’s Nippon Steel Corporation’s acquisition of the insolvent company after a dogged battle for over two years.
However, his happiness was shortlived when on Monday morning he saw the shares of Essar Steel was not reflecting on his HDFC Securities demat account.
“I had purchased the shares about five years back and did not want to give when the buyback was announced for delisting by the previous owners (Ruias) as the offer was too low,” said Rajaraman.
When he checked with HDFC Securities it was in a denial mode and agreed to get back after he showed his previous NSDL account statement to prove the point, he said.
Even if the shares have been extinguished after the insolvency process how can someone just remove the shares from the demat account without intimation to investors, particularly when there are about 10 per cent of the company’s holding still held by the general public, questioned RN Gupta, another investor.
In response to a BusinessLine question, HDFC Securities spokesperson said due to the de-listing of Essar Steel shares basis order under Insolvency and Bankruptcy Code - 2016, they are not getting reflected in the demat accounts of customers (who are holding that share).
“We have reached out to the RTA (Registrar and Transfer Agent) regarding this particular issue and they are in the process of sending out an appropriate communication to the Essar Steel shareholders,” he said.
“While banks and government are free to burn crores of hard-earned public money by accepting lower offers for stressed assets, they should not punish the common shareholders. Instead they should protect the interest of shareholders who have been holding the equity for so long hoping against hope,” said Rajaraman.
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