Re : Legal ownership of pledged shares

V.Satya venkatarao (Querist) 24 January 2009 This query is : Resolved
We are now seeing more news on the issue of pledge of shares as a security for loans. Memebers may like to enlighten on the specific issue which

" Who is considered the legal owner of the shares after they are invoked by the pledgee owing to default in the performance ofthe loan agreement terms.In invocation of pledge as the shares pledged are trasnferred from the demat account of the pledgor to that of the pledgee.Is this transfer be construed as change of ownership

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PALNITKAR V.V. (Expert) 27 January 2009
Yes. In the given circumstances, it amounts to change of ownership as the pledgee does get right to get the pledged shares transferred in his name by virtue of the agreement between the pledgor and the pledgee.

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