Have I lost all my money?

21st Nov '21 by GaryCottam

17 comments 1667 reads

I have 650 $VEDL shares (Super Stock with StockRank 99) which were listed on the NYSE and were worth approximately £8,000.

Vendata decided to delist from the NYSE to concentrate on the Bombay Stock Exchange (BSE), to save money.

No warning of this, Interative Investor only published a corporate action after the event, and have since said:

"Unfortunately, we are passed the details from the stock exchange after being released from the company, they are then uploaded to all shareholders accounts. The delisting does mean your shares currently have no value"

I fail to see how a company can decide to delist leaving shareholders with shares of zero value, if they could surely all companies would do this and regain 100% control of their companies.

If a company delists in this way it seem more like a share buy back, and shareholder are compensated.

It was a sizeable part of my pension, any advice or clarity will be gratefully received.

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champians

21st Nov '21

You might be out of pocket for a while but eventually you'll see a credit to your sharedealing account. Quite how much should be similar to what the shares were worth before delisting but when its happened before to mine its been a bit dark arts as to how.

Leebod

Did you see this? https://economictimes.indiatim...

GaryCottam

@champians That sounds quite positive - Seems strange that all I can get from Interactive Investor is that they have no value. How long do you think I should leave it, and if nothing arrives any ideas what couses of action (if any) are open to me?

Yep, I had see that when I was Googling like made for further info, but I only understood the laymans stuff, delisted to save money an moving all to BSE.

Moved my pension to a SIPP less than a year, with little knowledge or experience. I rely mainly on my precious interactions with companies and the Stockopedia Rankings. So other investments include Apple (I like their products) Google ( I work in search) ASO high StockRank (Not as high as VEDL though). So far it has gone OK, but if I was to lose VEDL, I would be in the red.

Brave move, I've also done the same. I tend to stick with UK micro to large cap with a few funds.

AnonymousUser1822519

Perhaps contact Vedanta directly, their headquarters are based in the London, and asking about your delisted shares.

Thanks Guy, I'll do that straight away.

timarr

SEC listing of announcement: https://www.sec.gov/Archives/e...

It's complex but roughly it looks like you had a couple of months to act - which, in practice, would have meant selling the shares. Assuming you haven't taken any action it now looks like Citibank, who I assume are the depository bank, will sell the underlying shares (which presumably are listed in India) and you'll eventually be remitted the balance.

The bad news is that it looks like any remittance will be subject to Indian withholding tax at the eyewatering rate of 43.68% plus expenses.

Thanks for the info, yep that is eye watering!

Effortless Cool

Without wishing to be rude, Gary, I do think that you need to consider whether it is sensible for you to be directly investing your pension funds in a SIPP "with little knowledge or experience". Your description of your experience with Vedanta suggests to me that it is not.

Why not consider ring-fencing, say, 75% of your SIPP funds for others to manage (others have more knowledge of this area than me, but I understand Fundsmith is highly regarded and Vanguard have very low fees). You can then use the remaining 25% to build up your knowledge and experience through your own research and stock selection.

22nd Nov '21

Not rude at all, I appreciate your advice, and I may well go that way.

Following Guybrush's adivice, I contacted Vedanta, who came back with the following:

Process for ADR Cancellation: https://depositaryreceipts.citi.com/adr/common/file.aspx?idf=5757

Please be advised that holders who surrender their ADSs (or the certificates evidencing such ADSs, if applicable) for cancellation will be able to take possession of the corresponding Shares in book-entry form only and, as a result, they must have, or establish, a custodian or brokerage (demat) account in India to receive such Shares prior to surrendering their ADSs to the Depositary for cancellation. What a holder with the ordinary shares does once they are deposited into a demat account in India is up to the holder.

I have sent this to Interactive Investor and await their response.

It looks as though at least this part will need to be completed by me:

"Ensure you have established a DR-Type DMAT account with a local broker in India."

I have Googled this but there is not a clear path forward.

Again, any advice greatfully recieved.

I think that "advice" is at best partial but it's probably because you asked something like "how can I keep my shares." If you go back to the SEC announcement it says this:

Following the distribution of the formal notice of termination of the deposit agreement, Holders of the Company’s ADSs will have at least 61 days todecide whether to retain their interest in the equity shares of the Company. At any time, on or prior to December 8, 2021, ADS holders may surrender their ADSs in exchange for the underlying ordinary shares of the Company. Please be advised thatholders who surrender their ADSs (or the certificates evidencing such ADSs, if applicable) for cancellation will be able to take possession of the corresponding equity shares in book-entry form only and, as a result, they must have, or establish, acustodian or brokerage (demat) account in India to receive such equity shares prior to surrendering their ADSs to Citibank, N.A. for cancellation.

Which is the advice you've been given. However if you read on from that it says:

As soon as practicable on or after December 9, 2021, Citibank, N.A. may sell the equity shares underlying any ADSs that have not theretofore been surrendered in accordance with the deposit agreement. Citibank, N.A., shall there after hold un-investedthe net proceeds of any such sale, for the pro-rata benefit of the holders of any such then-outstanding ADSs and promptly remit the net proceeds to such holders of ADSs through the payment mechanism of DTC. The ADS will be deemed cancelled and terminated from the date of the cancellation of the ADSs resulting from the sale of the underlying equity shares.

My reading of that is that if you don't surrender the shares the depository bank will sell them to you and remit the balance. However, that is something you should take up with ii.

Please note I have no experience in this area. I'm just reading the relevant SEC announcement.

epo001

Ouch! Why did II not notify you of the SEC announcement? If they let you buy and hold US shares then they should also provide you with notifications of the US equivalents of our corporate actions. They are IMO negligent in not doing so.

I would formally complain to II, they will almost certainly tell you to b**ger off, you can then complain to the FCA.

Many thanks timarr, I appreciate you taking the time to post that, I'll up date once ii get back to me.

24th Nov '21

Looks like you were correct timarr, Corporate Action statement on ii yesterday:

Delisting - Update

Effective date: 9th November 2021
Market affected: New York (NYSE)

Following the recent Delisting of Vedanta Limited ADSs for the New York Stock Exchange, the remaining ADSs will be submitted to the agent to enable the sale of the underlying shares in the local market.

The sale proceeds will be allocated upon receipt from the agent, minus any fees or expenses arising from the sale of such shares.

Thanks for the advice eop001. I did query why no notification, the answer I got was:

"Unfortunately, we are passed the details from
the stock exchange after being released from the company, they are then
uploaded to all shareholders accounts. The delisting does mean your shares
currently have no value."

I was as miffed by the short reply as anything else, nothing helpful at all, hence my post here.

I'll see how much I end up being out of pocket, and plan from there.

And I'll post an update here when I have one.

Have I lost all my money?

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GaryCottam

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