Found paper certificate for old shares - need advice

One of my relatives found an old paper certificate for 10 shares of Godrej Soaps. On contacting the investor relation team of Godrej Consumer products, this is the reply I received.

In 2001, Godrej Soaps Limited (GSL-Face Value Rs. 10/-) was demerged into Godrej Industries Limited (GIL-Face Value Rs. 6/-) and Godrej Consumer Products Limited (GCPL-Face Value Rs. 4/-).

Thereafter, in September 2002, the Company Godrej Industries Limited (GIL) underwent a scheme of Buyback @ Rs. 18/- per share. As per the scheme of Buyback and Orders of the Hon’ble High Court of Judicature at Mumbai, the option forms were sent to all the shareholders, and the shares were purchased from those shareholders from whom the option form stating their intention to continue holding the equity shares were not received by us before the due date. Since the option form was not received before the due date, the share purchase consideration warrant no. 500507 for Rs. 270/- for folio no. 0010403 was dispatched. Since a period of 7 years has elapsed from the date of issue of the account (in 2002), the unpaid amount in the account has been transferred under Orders of Hon’ble Bombay High Court to Prime Minister Relief Fund.

My query is about this practice of purchasing the shares by the company on not receiving any written confirmation from the investor. The relative was one of the employee of Godrej Soap and there may have been so many other employees who would not have understood the fact that they had to manually reply ‘why they want to continue holding the stock’ ! The company just decided that they’ll just purchase the stock back.

Even though the amount of shares is negligible, is this practice legal and ethical?


In the past some companies followed such unethical practice for buy back of shares.
Ex. Sterlite industries,DLF,Gandhimathi appliances.Some companies increased the Face value
exorbitantly high say Rs.1.00 lakh thus forcebilily purchased from small investors.
SEBI condemned such negative tactits of the companies.
But i am not aware whether the procedure is banned by SEBI.

Did some googling around this and it seems some shareholder had even filed a petition in HC terming this as an unethical move but it seems the HC had given judgement in favor of Godrej Industries. So there’s not much that we can do about it.

Thanks for the help though.