Close to 117 crore unclaimed shares worth more than Rs 50,000 crore are lying in the Investor Education Protection Fund (IEPF), managed by the Ministry of Corporate Affairs (MCA). This includes dividends on these shares. However, the MCA is about to make the process of searching and claiming these ‘lost’ shares easier soon.
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In less than a month, the integrated IT portal for search and claims of these unclaimed shares will be functional. According to MCA officials, the search facility will be good to go in a month, but the claimed facility might take some more time and will continue to be available on V3 of MCA 21. So, in a month, Indian residents can do a status check of their lost shareholdings or unclaimed dividends of their parents or grandparents online.
The new integrated portal was mentioned by Finance Minister Nirmala Sitharaman in her budget speech this year. With the new portal, shares and dividends stuck in the IEPF are just a click away. Indian citizens can soon do a deep dive into an integrated IT portal to see the status of their or even their parents and grandparents' lost wealth.
The search module on the new portal can give you results by name, district etc. “In many cases, legal heirs don’t even know which company’s shares are in IEPFA. The search facility on the integrated portal gives you a way to search the shares held by your grandfather that remain unclaimed with IEPFA. You just need to do a search against his name or folio no or the district he belonged to,” a senior MCA official said.
Shares and dividends which remain unclaimed for more than seven years are mandated to be transferred to the IEPF. The Investor Education and Protection Fund Authority (IEPFA) is an initiative established under Section 205C of the Companies Act, 1956, through the Companies (Amendment) Act, 1999, with the primary objective of promoting awareness and protecting the interests of investors.
This fund accrues from various sources including dividends, application money, matured deposits, and more, which have remained unclaimed for a period of seven years. Once these amounts remain unpaid or unclaimed for seven years, they are transferred to the IEPF. The IEPF is managed and administered by the IEPFA, established by the Government of India in 2016.
Claiming shares from the IEPF involves a process regulated by the IEPF Authority and needs a lot of documentation. The first step is checking eligibility and verifying whether the shares can be claimed, followed by downloading and filling out Form IEPF-5 from the IEPF website. Upon filling out Form IEPF-5, claimants need to submit a printout of the form alongside other necessary documents to the Nodal Officer of the concerned company at its registered office for verification.
The company is then required to send a verification report to the IEPF Authority within 15 days of receiving the claim. All of this is done to protect investor money from fraud. In many instances, fraudsters claimed these unclaimed and forgotten shares from companies. Hence, a fool-proof process was devised for the claiming and searching of these shares and debentures.
(Edited by : Sangam Singh)
First Published: Oct 9, 2023 5:12 PM IST
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