A few months ago Renu, my twenty-something cousin, had shared on her Facebook wall something unusual. The post was on PAN or the Permanent Account Number. This alpha numeric code issued by the tax department has become the universal entry card for financial markets as several other numbers and codes that were prescribed have perished or are dying.
The post beautifully explained the structure pictorially: The PAN follows the alphanumeric structure – XXXXX1111X. The first five characters are letters; the next four are numerals, and the last character is again a letter. The fourth character of the PAN is one of the following, depending on the type of assessee who is allotted the number: C – Company, P – Person, H - Hindu Undivided Family (HUF), F - Firm A - Association of Persons (AOP) and so on. In addition, the fifth character of the PAN is the first character in the surname of the assessee. A PAN that doesn't follow this pattern can be deemed invalid.
Now, why am I telling you this? Last week, the market regulator put up a corrigendum. As a writer having to deal with corporate hole-pickers, I can appreciate how painful these can be. Nevertheless, errors somehow creep in for various reasons. To err is human, to issue corrigendum is correct publishing policy. Therefore, it is commendable that Securities and Exchange Board of India (Sebi) has duly published the following corrigendum: "Sebi has noticed few inadvertent errors in the PAN numbers of few entities (see table)."
|GLARING ERRORS |
Sebi noticed few inadvertent errors in the PAN numbers of some entities
|Sl No||Name||PAN as mentioned |
in the order
|i||M/s SGI Research & Analysis Ltd||AAOCS553R||AAOCS5535R|
|ii||Shri Siddarth Jay Marathe||BOPLM1668G||BOLPM1668G|
|iii||Shri Baldev Raj Sharma||CRGPS318AN||CRGPS3281N|
|iv||Shri Sanjeev Sharma||AARPS733G||AARPS7233G|
|Source: Sebi corrigendum dated January 16|
If you notice the errors, there are structural flaws. In three PANs, there are only three numerals. In the case of Siddarth Jay Marathe, since he is an individual, the fourth character should have been P'. Let us assume that the whole-time member Rajeev Kumar Agarwal and his team have not studied the structure of the PAN in detail or have just copy-pasted what was given to them. We shall also hope the errors are inadvertent as the corrigendum clearly states.
But what happened between January 11, 2013 when the order restraining these people from taking part in the securities markets and January 16, when the corrigendum was published? Since the PANs were incorrect, the depositories and exchanges would not have been able to freeze the correct account.
For example, there would have been several hundred Sanjeev Sharmas in the securities market. Was there any action in their accounts, if they had any balance? Did the error help them? These things need to be verified and disclosed to the public, since the violators are the alleged perpetrators of the multi-million Stockguru scam.
Further, Sebi's order against the alleged scamsters does not address the issue of illegal stock advice given by Stockguru without any Sebi registrations. Let us hope they are working on that and will pass an order soon, of course, with the correct PAN. Some trouble could have been avoided had Sebi been on Facebook. And, I would have tagged them on Renu's post.