Undoubtedly, SEBI has done a lot to protect the interest of investors. There are, however, some areas where action needs to be initiated to ensure that investors, particularly small gullible ones, are protected from unscrupulous promoters, conniving auditors and mercenary manipulators.
The limited punitive actions taken by the department of corporate affairs and SEBI against the companies and their directors do not answer the basic question of compensating the investors who for no rhyme or reason are the losers. The argument that investment in equities is a matter of risk and reward cannot be extended to the frauds committed by these companies. Small investors, at least up to Rs 25,000, need to be compensated.

Holding two car dealers guilty of unfair trade practice, the district consumer forum has directed them to pay a compensation of Rs 25,000 along with litigation cost of Rs 5,000 to sector-38 resident Manjit Singh. The forum headed by Jagroop Singh Mahal directed Prithi Pal Singh and Sukhwinder Singh, dealers of second-hand vehicles in Car Bazaar, to return Rs 1,20,000 with interest to Manjit for not providing him necessary documents of a car purchased from them.
Despite repeated requests, nothing was done in this regard which forced Manjit to report the matter to the police. Later, the complainant approached the Registering and Licensing Authority, Haryana, and was shocked to learn that the vehicle was under the process of transfer in the name of one Mahesh Kumar of sector 40-D, Chandigarh. Following this, Manjit filed a complaint before the forum alleging cheating, fraud, deficiency in service and unfair trade practice.

If you’re an online shopaholic, make sure you have a personal identification number (PIN)/password for your credit or debit cards. Otherwise, forget about using them for internet shopping from August 1. A recent directive by the Reserve Bank of India makes it mandatory to have an additional authentication passcode verified by Visa or MSC (Mastercard Secure Code). This is in addition to the other information already on the card like name, card number, expiry date and CVV (card verification value) number
So how do you get this new password? Credit/debit card users have to register online with their banks, giving personal and card details. They will then be given a PIN or password to be be used as an additional layer of security at the checkout point before completion of the transaction.

So, if you did not know about this directive, and wonder as to why your card does not seem to work online anymore, now you know the reasons for the same. So, go ahead, and contact your bank for getting the confirmation. As to whether this is fool-proof, only time will tell.

- Pepe Jeans: The store had this huge sales sign outside proclaiming that if you buy 2, then you get 2 free (and of course they had the ‘*’, means that some conditions will apply). However, if you thought that this was a great bargain for getting 2 Pepe jeans, then think again. The offer was only for Pepe T-shirts, something that they forgot to put in the huge sign.

- Priknit: I was looking for some discounted jackets for the next season, and Priknit with it’s 80% offer seemed fishy, but why not give it a try. So off I went to the Shipra Mall in Indirapuram in the NCR region, and entered the store over there. I looked at a jacket when inside, and speculated that such a jacket should not cost more than Rs. 2,000 at the most, and it looked impressive, and with 80% discount, could be considered for buying. Imagine the shock when the list price of the jacket was listed at Rs. 4,000, and on a closer look, some of the threads on the jacket seemed to be awry. And there were some better jackets that were listed at Rs. 6,000 – you could have knocked me down with a feather.

- Cantabil was the next one – Here also there was a 80% discount. Well, guess what, more of the same. Shirts (and nothing spectacular) were listed at Rs. 1600. I am pretty sure that people would not have even looked at the store again if these shirts were retailed at their full list price; I made a quick exit from the store. If I wanted to buy such shirts, would rather go to a much better place.

- Kouton was the first such brand that was offering these 75% kind of discounts on clothes, and I remember buying some pretty great looking shirts from at discounted prices of Rs. 400, and those shirts looked great, but when I had gone there recently, the quality and designs had degraded.

Final realization: What looks like a bargain may not be a bargain (there is this psychological thing where you end up buying something if it seems to be a great bargain, and you have to spend some effort in order to prevent yourself from falling under this spell), and a lot of these retailers are indulging in some pretty ugly anti-consumer practices. Please add more such issues you know about in comments.

Empowering a distraught woman, whose only son died before moving into the house he had so fondly booked, UT consumer forum, in a rare judgment, directed Orbit Apartments to pay damages of Rs 38,000 per month until handing over of possession. The forum, headed by Jagroop Singh Mahal, also awarded Rashmi Mittal of Phase V, Mohali, Rs 25,000 as compensation and Rs 5,500 towards litigation costs.
In its reply to forum’s notice, Orbit Apartments stated it had no objection in handing over possession if the balance amount was paid and IHFL permitted the transfer of the flat in the complainant’s name. IHFL, in turn, pleaded that it had paid all due instalments to the builder on Deepak’s behalf but, according to the agreement, the last instalment was to be paid at the time of the developer handing over possession. The forum then asked the bank to promptly issue a no-objection certificate in favour of Mittal.

Typically, a lot of property developers are not well developed in the manner of how to handle customer grievances and could-shoulder (or otherwise do not give a proper hearing) the customers, leading to a lot of ill-will, and the customers getting badly impacted.

Thus, be very watchful when you see such offers, and always take the time to do a study.

The manager of a Delhi-based private firm was arrested along with two accomplices on Friday on charges of allegedly making purchases using the credit card of an ICICI bank customer.
“We registered a case on the complaint of Atri and arrested Goyal from the Rohini branch of ICICI Bank. The other two were arrested at the instance of Goyal. During interrogation it was revealed that Goyal is the manager of i-process, an outsourcing private company of ICICI Bank, dealing with credit card users whereas accused Ashish Katyan and Dev Aggarwal were working as recovery agents in another collection agency,” said DCP (outer) Atul Katiyar. “The accused used to contact the customers and introduce themselves using a fake name. Then they used to send Ashish Katyan for collecting the card from consumers. Instead of blocking the cards, the three used to go shopping.

The basis for the information that these thieves come up with is information that the bank has revealed to them, so the bank should be the one to blame for this. In the process of reducing their costs by outsourcing this service, they have let such a thing happen, and hence need to be penalized. If this was a country with stronger implementation of privacy and data theft laws, the bank would be in serious trouble.

NEW DELHI: The state consumer commission has pulled up private airline, Air Deccan, for cancelling the tickets of a passenger, booked six months in advance in a promotional fare scheme, just six days ahead of the departure date. The airline has been fined Rs 50,000 of which Rs 25,000 has been given as compensation to the consumer while the rest has been deposited in the state welfare consumer fund.
The airline had told the passenger that the flights on the Mumbai-Delhi route were not operational between May 1 and May 31, 2007 but contrary to claims, the passenger found out that the flights were not cancelled. As a result, he along with two of his relatives had to fly on a more costly flight that cost him an additional Rs 7,650.

From time to time, we find that airlines have been found to indulge in such customer unfriendly practices, and yet there is a feeling that they don’t care that this experience earns them bad remarks and reviews. Low cost carriers are supposed to do away with frills, but not basic customer experience, else they will keep on earning bad press like this.

Thousands of retail investors in the primary market could be in line to be compensated monetarily for losses due to manipulation in the initial public offering (IPO) allotment process of 21 companies two years ago. A Sebi-mandated committee has recommended that individual investors who were short-changed in IPOs between 2003 and 2005 be compensated in monetary terms.
The Justice Wadhwa committee has worked out a compensation of Rs 92 crore for investors who had applied for shares in the retail category in 21 IPOs in 2005-06. This is based on the closing price on the listing day for all these IPOs, which include IDFC, Jet Airways and Suzlon. In essence, investors who lost out in these IPOs should be paid the difference between the offer price and the closing price on the listing day, the committee has said in its report, according to sources. This is reckoned to be the unjust gain made by scamsters who cornered shares meant for individual investors.
Sources said the report has recommended that the first to be compensated should be retail investors who failed to get any allotment, followed by those who were allotted fewer shares than they had applied for. Orders to disgorge ill-gotten gains are common in the US, the world’s largest financial market. Finance Minister P Chidambaram had said last year that he wanted to send out a strong signal to those attempting to defraud investors by compensating them for the losses they had incurred. He had told Sebi to work out a mechanism to ensure this.

Sebi board to scan old records

The Sebi board will now have to consider the Wadhwa committee’s recommendations and then take suitable action. This would mean going back to old records with market intermediaries and identifying thousands of investors, which can be a cumbersome exercise. In almost all 21 IPOs, the shares were listed at a premium to the offer price. The compensation can be paid out by selling securities worth over Rs 140 crore of those operators involved in the IPO scam which have been frozen in their depository accounts based on an order issued by Sebi.
The 2005-06 scam featured a clutch of operators who put in thousands of fictitious applications in several IPOs in the retail category of a small value. After allotment, these operators transferred the shares to another set of players, who in turn transferred them to financiers who had provided the funds for investing in the IPOs. These shares were then sold on the first day of listing, landing them a windfall — the price difference between the IPO price and the listing price. Thousands of bank accounts and demat accounts were opened in the names of fictitious entities, which Sebi investigators unearthed in 2006 after checking over 100 IPOs.
During the probe, it came to light that key operators had cornered shares representing 0.52 % of the total number of shares allotted to the retail investors in the Jet Airways IPO. In the Suzlon offering, 3.74 % of shares were allotted to operators using over 21,000 different accounts while in the NTPC issue, the operators used 12,853 accounts to corner 1.30 % of the total number of shares allotted to investors.
Of the 21 IPOs, the IDFC IPO’s offer price was Rs 34, against which it got listed at Rs 49.9 — a premium of over 46 %. The shares closed on the opening day, at Rs 69.5%. In the case of Yes Bank — the offer price was Rs 45. On listing, it rose to Rs 65, a 44% premium, and closed at Rs 61. Maruti Udyog offered its shares to investors at Rs 125. On listing, it climbed to Rs 158.4, a premium of 27% and closed the day at Rs 164.05. Amar Remedies had an offer price of Rs 28, listed at Rs 50 — a premium of 78%, while for NTPC, the offer price was Rs 62 and the listing price Rs 70 — a premium of 12.9%. It closed at Rs 75.5. TCS had an offer price of Rs 850. It listed at Rs 1,076 — a premium of 27%, and ended the day at Rs 987. Suzlon offered its shares at Rs 570, listed at Rs 640 — a premium of 25 % — and closed at Rs 690. Jet airways offered shares at Rs 1,100, listed at Rs 1,211 — a 10% premium — and closed at Rs 1,305.

Such a measure would be very welcome for investors; most retail investors feel that the market is always manipulated, and that SEBI turns a blind eye to such things. So if SEBI can take a step in this regard, it would be extremely welcome.