05 July 2010
To the best of my knowledge, the matter goes as follows:
When dematerialisation of shares was introduced in the country, many people started during fraud. Duplicate share certificates were obtained from the company and were dematerialised. The original share certificates were also traded on the stock exchange in physical form. Later on the company got to know that there was a huge amount of duplicate shares that were dematerialised by scamsters and the shareholders holding the original shares in physical form were unaware about this. SEBI based on this experience introduced the concept of quarterly audit of secretarial audit certificate in which the physical and demat shares were to be reconciled with the total issued capital of the company.
The unreconciled difference in case of reliance is this suspense account.
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