Hello,
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?
TIA