Rs 10 lakh fine for Prudential Capital

For the small investors of Kolkata’s Prudential Capital Markets Ltd — who lost heavily in company’s fixed deposits and shares...

For the small investors of Kolkata’s Prudential Capital Markets Ltd — who lost heavily in company’s fixed deposits and shares — a Sebi order to fine the company comes too late in the day.

The market regulator, the Securities and Exchange Board of India (Sebi) has fined the company of Rs 10 lakh for its failure to redress the grievances of the investors. Interestingly, as the company has gone into liquidation in December 2001, it’s the official liquidator appointed by the Calcutta High Court who has been asked to pay the fine.

The promoter of the company, Vinod Baid is currently lodged in a Kolkata Jail for siphoning off funds from Bank of Rajasthan. Baid had raised nearly Rs 150 crore from investors and banks and Prudential came out with its first public issue in 1994.

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In 1995, Prudential Capital Market Ltd launched a slew of fixed deposit schemes like, Prudential Monthly Income Scheme, Prudential Certificate, Prudential Quarterly Income Scheme and Prudential Cumulative Scheme. Afer the CRB scam, the company collapsed making — thousands of its investors poor overnight.

The company was also featured in the ‘Loot & Scoot’ series in 2002 which highlighted the woes of small investors and how the regulators failed to protect investors’ money.

In its order March 10, Sebi said it had asked the company to resolve 424 complaints of its investors but the company failed to take any action on them. Sebi was told that an official liquidator has been appointed by the court. ‘‘Accordingly, a notice of hearing was issued to the liquidator to appear for the personal hearing on behalf of Prudential Capital market.’’

However, the liquidator challenged the maintainability of the present proceedings without the sanction of the court and clarified that in case of an proceedings initiated against such companies in which the liquidator had been appointed, the leave of the court was to be obtained. Although the acknowledgement was received from the liquidator, no body appeared for the said proceedings.