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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Father’s gift of 750 crores

Posted by Muthu on June 19, 2015

We’ve written some time ago as to how there is a government arm called ‘Office of the custodian of enemy property’ coming under Home ministry and governed by Enemy property act of 1968.

This office has confiscated share certificates from Pakistan nationals after the war of 1965 and 1971.

The value of these shares was Rs.29.4 crores in 1971. In 2015, the value of the same is Rs.10,000 crores receiving tens of crores every year as dividend.

We’ve also mentioned that these are confiscated shares and not a well thought and structured portfolio. These are being kept as it is for last 44 years. So definitely this would also contain perished companies, fraudulent companies who stole investor money, sub-par performers etc. The idea I’m trying to convey is that this confiscated stock portfolio is not like Sensex or a mutual fund, which are periodically changed and actively managed. Despite that equity has multiplied wealth so much.

Today I attended a session by Nilesh Shah of Kotak mutual fund. He mentioned about a news item appeared in Times of India 4 years ago. After coming home, I Googled and found the same.

It talks about a father gifting 120 shares of Wipro to his son in 1951, 64 years ago. The shares would have probably been worth thousands of rupees then. At the time of publishing of article in 2011, after stocks splits and bonus, the shares were worth, hold your breath, Rs.750 crores. Dividends itself would run into crores of rupees every year.

This is the power of equity, power of buying right and sitting tight.

I’ve reproduced the news item below.

http://timesofindia.indiatimes.com/city/mumbai/US-citizen-moves-court-seeking-release-of-his-shares/articleshow/9217946.cms

“A US citizen has moved the Bombay high court for direction to the Custodian of Enemy Property to release 120 shares along with bonus shares and accrued dividend of Western India Vegetable Products Ltd ( WIPRO), saying its no more enemy property. Additional solicitor general Darius Khambata told the court that the shares are worth Rs 750 crore today.

A division bench of Justice P B Majmudar and Justice Mridula Bhatkar on Wednesday was hearing a petition filed by Abubaker Cochinwala, a Texas resident, stating that at the time of vesting, they were in his name by a declaration of gift deed by his father in 1951 and being US citizen the shares could not be enemy property. His advocate Rajiv Narula argued that the property (shares ) is vested with the custodian only for management purposes in a “fiduciary capacity”.

Khambata said Cochinwalla has a stepmother and 10 other siblings, some based in Pakistan and others in the US, and there may be conflicting claims if the shares are surrendered to him. Observing that prima facie the high court cannot go into these issues, the judges adjourned the matter asking Cochinwala to state if he was willing to file a substantive civil suit in appropriate court to get his title adjudicated.”

We’re assisting you to both buy right and sit tight. Stay the course for 20 years and see the results.

2 Responses to “Father’s gift of 750 crores”

  1. Raees Aziz said

    It is surprising why Mr Cochinwala took 60 years to report this matter.Was he sleeping?.More suprising is that the custodian department has only one objection.suppose the 11 other legal heirs have no objection if these shares worth 750 crores are handed over to the petitioner.
    considering the fact that the amount involved is huge it appears the custodian department is playing a fixed match with Mr Cochinwala.Chor Chor Chor main ne shor.

  2. The latest is that after failing in his attempt to grab these shares Mr Abubakr Cochinwala on the advice of some corrupt elements in India has given power of attorney to some Amjad MEHR Baksh.In my opinion Mr Baksh should be kicked out of the custodian department.The concerned ministry should take legal action against him as Mr Abdul REHMAN Cochinwala had testified before the claims commissioner Karachi in 1956 that all the property including bank deposits,Debentures,shares etc were completely joint and that there was no controversy about it.If these shares or any other property is handed over in this manner it will encourage the other side to do the same.As I am the grandson of the chairman of the group,I request the concerned authority to be extra careful in dealing with this matter.This so called Mutawali( caretaker),even does not know the correct number of shares or perhaps this is a part of the game.The cochinwala family is based in U.S.A., Canada and the majority of the members are settled in Karachi,which is the reason these shares are treated as Enemy property.

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