During the process of issuing a share certificate during the transfer of shares, it's stated that first, the issued share certificate has to be surrendered by the former shareholder (or their certificate is cancelled by the company in case of non-surrendering). Then this certificate has to be issued in the name of the latter shareholder.
But what if the company, for fraudulent purposes, cancels the share certificate of a shareholder and without any transfer of shares, issues a new certificate in the name of another person?
So what would be done in this case?
Fraudulent Share Certificate Issuance: Penalties Under Section 46 of Companies Act 2013 for Illegitimate Transfers A query was raised regarding the fraudulent issuance of a new share certificate without an actual transfer of shares. The process typically involves surrendering the original certificate by the former shareholder or its cancellation by the company. Concerns were expressed about potential fraud where a company cancels a shareholder's certificate and issues a new one to another person without a legitimate transfer. In response, it was suggested that penalties under Section 46 of the Companies Act, 2013, would apply to the company and involved officers for such fraudulent actions. (AI Summary)
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