Last week, SEBI issued an ex-parte ad-interim order in a case involving Sharepro Services (I) Private Limited, which is a registrar and transfer agent (RTA) for a number of companies. Based on certain complaints, SEBI began investigating into the affairs of Sharepro and found a number of irregularities. For example, dividends which were to be transferred into the Investor Education and Protection Fund were instead diverted to the accounts of certain parties related to the promoters and a senior employee of Sharepro. Similarly, dividends payable to registered shareholders were instead paid to certain related parties. Share transfers too were incorrectly effected to benefit such related parties at the cost of the real owners of the shares. In all, the facts of the case are egregious and indicate a deliberate set of actions on the part of Sharepro to enrich its promoters, senior management and their related parties to the detriment of the companies that are its clients (as well as their shareholders). Moreover, Sharepro appears to have taken efforts to mask the trail of transactions, and also to mislead the investigation process. Based on its investigation and the information currently available before it, SEBI passed the order restraining certain persons from accessing the capital markets. It also asked companies who are clients of Sharepro to conduct a thorough audit of the records with respect to dividends and transfer of securities. SEBI finally advised clients to switch their activities to an alternative RTA or move those in-house.The purpose of this post is not to discuss the merits of Sharepro case, which is subject to further determination by SEBI (as this is only an interim order). Instead, this post touches upon the effectiveness of the interim order. While the order restraining the parties from accessing the capital markets is understandable, it leaves the victims to resort to self-help. The order does not provide any protection as such to the shareholders who have been deprived of their rights due to the actions of Sharepro and its promoters and management. Granted this is only an interim order, but it is somewhat intriguing that Sharepro’s clients have been “advised” to take their own action in moving activities either in-house or to an alternative RTA. The question arises as to whether further preventive measures ought to have been ordered at this stage. As Mobis Philipose suggests, these measures may to too little too late. Professor J.R. Varma goes further to argue that the control of Sharepro must be taken over by the Government, as was the case with Satyam Computers. Although a number of possibilities exist, rapid action would be of the essence to prevent any further damage, and to protect the interests of various stakeholders.