Earlier all the shares bought in the stock market were provided in the physical form. Later in 1996 when demat account was introduced, the shares were converted and made available in dematerialized form.
But if someone still holds physical shares of the listed company can request for dematerialisation of any share in physical format by following the set process of DP and issuer company.
In short, if you have all the details of the company with the face value & ISIN details that matche the details available in depository & exchange then you can easily get it converted into demat form.
Here the approval of the issuer company plays a vital role.
Recently, Shiraj (name changed) reported one case where when he tried to convert physical shares bought by his grandfather in 1995, the company refused to provide approval of the same.
Here is the whole case and the solution of what can be done in such cases:
ADB: Hello Shiraj, we came across your case where you mentioned some scam related to dematerialization.
Shiraj: Yes sir, actually the issuer company is not considering my request to dematerialize shares.
ADB: Okay, it is a violation of the law. Can you please provide a detail of what actually happened?
Shiraj: My GrandFather who is no more, bought 45 shares of PI Industries in the year 1995. The company later underwent multiple stock splits and today total number of shares are equal to 1,350.
I requested to convert those physical shares into dematerialized form.
But the issuer company said that they had already dematerialized those shares.
ADB: That’s strange. Can I know the value of those shares?
Shiraj: Yes, the current value of those shares is ₹54,00,000.
ADB: Do you have all the documents and details?
Shiraj: Yes sir, I have shared that detail with them as well, but they didn’t give any satisfactory response and cancelled my request.
ADB: So, according to them they had already dematerialized shares. Did you ask them the details of the demat account?
Shiraj: I asked them for the details but they refused to share.
ADB: This gives an indication that there is something wrong. However, if you have all the details of purchase and shares then you will get your shares in the demat account by following the right process.
Shiraj: Sir, please guide me how to proceed?
ADB: In this case, make sure you check & verify all the details especially the ISIN detail. If all the information is correct and still the issuer is rejecting your request then you can proceed with the following steps:
- Escalate this issue and reach out to the compliance officer of the company.
- File a complaint in NSDL or CDSL, in case you don’t get a satisfactory response from the company compliance.
- The last step is you can reach out and lodge a complaint in SCORES.
- Along with this you can seek legal advice to know better ways to pursue the complaint process.
Shiraj: Thank You sir for the support.
ADB: You’re welcome. In case you need further assistance feel free to reach out to us.
Shiraj: Sure Sir.
