Help for investors who’ve lost share certificates

HELP IS at hand for shareholders who have lost their share certificates, says Simon McGregor, the co-founder of Weirbridge.

Weirbridge last week announced its new service offering, lost scrip indemnity insurance, for shareholders who have paper share certificates.

Weirbridge and its partners, First Equity Risk Management Services and Bryte Insurance Company, are the only fully South African providers of lost scrip indemnity insurance.

McGregor said the new venture can help South Africans to recover their lost share certificates, or those who want to sell their shares.

“There are lots of people who are getting on in years, and they want to realise the cash that they have on their shares. If they come to us and say, ‘I’ve had Anglo American shares since 1980, but I don’t know what has happened to my shares or share certificates,’ we can help them to find out how many shares they’ve got, and if they have lost their shares certificates, provide them with insurance that they need to sell those shares,” said McGregor.

He said that if the shareholder had died, the executor of his or her estate could approach Weirbridge, which would issue insurance to the estate, allowing the estate to sell the shares.

“The estate can sell those shares, and when they get the cash back, they can distribute the cash to the beneficiary of the estate,” he said.

McGregor said more awareness around the issue was necessary.

“Where it has become important is that a number of companies have done very broad-based issues of share certificates to employees and other groups.” Many of the people who had benefited from these programmes were sitting with shares that they had not realised, he said.

“If you hold a share certificate and you want to sell your shares, you will have to present the original share certificate to your stockbroker. If you have lost your share certificate and you would like to get a replacement, we can help you. The company in which you hold shares will only issue you with a replacement certificate if you have take out lost scrip indemnity insurance. This insurance is to cover the company against an invalid claim on the shares. Weirbridge facilitates this insurance cover,” said McGregor.

According to Weirbridge, the central depository Strate completed the migration of all JSE-listed shares from physical certificated records to dematerialised shares in January 2002, and since then all trades on the exchange could be effected only with dematerialised shares.

Certified shares were no longer accepted by stockbrokers. There are still 400 000 to 500 000 paper share certificates in South Africa, representing nearly 2 percent of the market capitalisation of the JSE.