What good is a fortune if you can’t have your hands on it? Recently, a Kochi investor found out that the shares he bought 43 years ago are now worth Rs. 1448 crores. However, to his dismay, the company has denied claims to his fortune.
The 74-year-old investor from Kochi is now in a legal battle with a corporation which if he wins, can fetch him a fortune enough for him and his next few generations.
The person involved in this situation is Mr. Babu George Valavi and the corporation in question is PI Industries (previously known as Mewar Oil and General Mills Ltd).
Details
All of us are often involved in conversations about not investing in the current company or asset at the current time. “If I had invested in this company 20 years back, I’d be having crores of rupees in my bank account today”, is a common statement.
But what if we tell you, that a small-time Kochi investor had actually invested in a company that made it big. In fact, it got so big that he’s now the proud owner of shares worth crores of rupees.
However, the company denies all his claims, and the two parties are in a legal battle now.
The Facts of the Matter
Babu Valavi, a Kochi investor had bought about 3,500 shares in a company called Mewar Oil and General Mills LTD in 1978. Mr. Babu had bought the shares along with his 4 family relatives and the 3,500 shares made 2.8% of the then unlisted company.
Cut to 43-years-later, Mr. Babu is living a peaceful life as a 74-year Kochite while the company mentioned above also got itself publicly listed on the stock exchanges.
A key information here that one must remember while reading this story is that the company changed its name to PI Industries. As of 2020, the company made quite a name for itself and sits at a market cap of over Rs. 50,000 crores.
Reportedly, PI Industries is on the exchanges with shares worth Rs. 3,410 per piece. If one calculates the original stake of the Valvi folks, the family would be owning as many as 42.48 lakh shares. And if one puts the numbers on the calculator to find out the worth, their brows will surely rise. The amount goes to a mind-boggling Rs. 1,448.5 crores.
However, nothing is as simple as it may seem. Mr. Babu and his relatives who own 2.8% of the company were not paid the company’s fortunes in terms of dividends, splits, and other relevant remunerations. Further, the company also claims that Mr. Babu and his relatives are just not the company’s shares. The company claims that the shares Mr. Babu owned, were transferred to others years ago.
George Valavi, son of Mr. Babu Valavi was quoted in a New Indian Express report saying, “To our utter shock and disbelief, the company informed us that our shares were transferred to other people in September 1989. The original shares are safe in our custody. The company secretary informed us that they have issued duplicate shares to us and that they have transferred the duplicate shares to other people in September 1989.”
It should be noted that according to the Companies Act, to duplicate one’s shares, the company must seek consent from the shareholders in the form of FIR, advertisement, & affidavit. According to Mr. Babu, they had not provided the company with any such documents.
Company Sends Executives Down to Kochi
Sensing that the situation can go haywire, the company sent its executives down to Kochi. The executives validated the genuinity of Mr. Babu’s share certificates. After confirming so, the executives assured Mr. Babu that the matter will be brought to the company’s chairman. But when Mr. Babu contacted the chairman, he got underwhelming responses.
SEBI Gets Involved, Matter Suspended in Thin Air
Mr. Babu took the matter to the Securities and Exchange Board of India (SEBI). So far, the company has stuck to its guns and not budged. Meanwhile, Mr. Babu claims that the company has not provided relevant documents and that a larger “fraud” may have been committed by the top brass of the company.
