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WHAT IS IEPF?

Investor Education and Protection Fund (IEPF) is for the promotion of Investors’ Awareness and Protection of the interests of investors in India. The dividend which remains Unpaid or Unclaimed for a period of 7 (seven) years from the date of transfer to special account is transferred along with interest accrued to IEPF.

WHAT AMOUNT GOES TO IEPF?

Following amount (list not exhaustive) shall be credited IEPF.

  1. the amount in the Unpaid Dividend Account of companies remains Unpaid or Unclaimed for a period of seven years
  2. the amount lying in the Investor Education and Protection Fund under section 205C of the Companies Act, 1956;
  3. matured deposits with companies other than banking companies;
  4. matured debentures with companies;
  5. the interest or other income received out of investments made from the Fund;
  6. redemption amount of preference shares remaining unpaid or unclaimed for seven or more years; and

WHEN AMOUNT GET TRANSFERRED TO IEPF?

Any money transferred to the Unpaid Dividend Account of a company in pursuance to section 124(5) which remains unpaid or unclaimed for a period of seven years (7 year and 37 days from the date of declaration of dividend) from the date of such transfer shall be transferred by the company along with interest accrued, if any, thereon to IEPF.

WHETHER INVESTOR CAN CLAIM DIVIDEND /SHARES FROM IEPF?

On 5th September 2016, Ministry of Corporate Affairs had notified Investor Education and Protection Fund Authority (Accounting, Audit, Transfer & Refund) Rules 2016 which allows claimants to seek the refund from IEPF.

YES; Investors, whose shares, unclaimed dividend, matured deposits, debentures, application money or interest has been transferred to IEPF can now seek the refund from IEPF.

For claiming such amount, the claimant needs to file form IEPF-5 along with requisite documents on the IEPF website

PROCEDURE FOR CLAIMING REFUND

a. Any person, whose shares, unclaimed dividend, matured deposits, matured debentures, application money due for refund, or interest thereon, sale proceeds of fractional shares, redemption proceeds of preference shares, etc. has been transferred to the Fund, may claim by making an application in Form IEPF 5

b. The claimant shall send the copy of IEPF5 duly signed by him along with the following requisite documentsto the concerned company at its registered office for verification of his claim:

  • Copy of Acknowledgement
  • Indemnity Bond
  • Advance Stamped Receipt
  • Copy of Aadhar
  • Cancelled Cheque
  • Original Certificate
  • Proof of entitlement
  • Copy of Passport, OCI and PIO card in case of foreigners and NRI) as enumerated in Form IEPF-5

c. The company shall within fifteen days of receipt of claim form, send a verification report to the IEPF Authority as per the format specified by the Authority along with all documents submitted by the claimant.

d.  After verification of the entitlement of the claimant-

  • to the amount claimed: the IEPF Authority and then Drawing and Disbursement Officer of the Authority shall present a bill to the Pay and Accounts Office for e-payment as per the guidelines.
  • to the shares claimed: the IEPF Authority shall issue a refund sanction order with the approval of the Competent Authority and shall either credit the shares which are lying with depository participant in IEPF suspense account (name of the company) to the demat account of the claimant to the extent of the claimant’s entitlement or in case of the physical certificates, if any, cancel the duplicate certificate and transfer the shares in favour of the claimant.

e. The IEPF Authority shall, in its records, cause a note to be made of all the payments made.

g. Time Period:  An application received for refund of any claim duly verified by the concerned company shall be disposed of by the Authority within 60sixty days from the date of receipt of the verification report from the company, complete in all respects and any delay beyond sixty days shall be recorded in writing specifying the reasons for the delay and the same shall be communicated to the claimant in writing or by electronic means.

h. In cases, where the application is incomplete, a communication shall be sent to the claimant by the Authority detailing deficiencies of the application.

i. In case, the claimant is a legal heir or successor or administrator or nominee of the registered security holder, he has to ensure that the transmission process is completed by the company before filing any claim with the Authority.

j. The claimant shall file only one consolidated claim in respect of a company in a financial year.

IEPF - CLAIM YOUR UNPAID DIVIDEND AND SHARES

In case you or your family/friends have funds lying with IEPF, it is time to track and claim your dues.

Crores of rupees in unclaimed money - right from old Equity Shares amounts to share application money, Dividend, Debentures, Interest accrued thereon and many more - is piling up but rightful owner are yet to understand the procedure to claim back from Govt fund.

Several reasons for dividend does not get claimed

  • Lost track of the funds owed to you.
  • Company/financial institution might have failed to locate Shareholder for dividend payment as contact and bank details change over the years but are not updated with the company.
  • You were not aware of the investments made by your parents/; neither you had the complete records of those investments.

The process of claiming investment back from IEPF is cumbersome and long legal process involving form filing and serious continuous follow-ups with authorities. But we should be happy with the fact that at least our investment in IEPF is safe with Government rather than being victimized with a Fraudulent withdrawal of investment likesharepro case.

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