Refund of unclaimed investments in companies made easier
PremiumCompanies Act mandates that businesses transfer to IEPF all the dues to shareholders which are unpaid or unclaimed for seven years. Shareholders can seek a refund of the same from IEPF
The ministry of corporate affairs has made it easier for investors to claim refunds of their unclaimed dividends, deposits and application money that companies have transferred to the Investor Education and Protection Fund (IEPF).
Companies Act mandates that businesses transfer to IEPF all the dues to shareholders which are unpaid or unclaimed for seven years. Shareholders can seek a refund of the same from IEPF. The latest move is to make the process of refund easier for shareholders. The funds that companies have to transfer to IEPF includes unclaimed dividend, matured deposits, matured debentures, application money due for refund, or interest on it and redemption proceeds of preference shares.
The ministry said in a statement on Friday that the idea was to improve ease of doing business and ease of living. The refund process is simplified by issuing the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2021.
The relaxations include replacing notarization of documents with self-attestation and easing of requirements of affidavits and surety.
“The focus of the change has been to make the process simpler and quicker for the claimants. The new regime envisages a trust-based model for faster citizen-centric services and turnaround time. It is expected that with these changes, many more claimants shall come forward to claim their shares and amounts from the IEPF Authority (IEPFA)," said the statement from the ministry.
So far, IEPFA has approved more than 20,000 claims refunding more than 1.29 crore shares. Shares of the market value of more than ₹1,011 crore and dividends and other amounts exceeding ₹20 crore have been refunded.
IEPFA was set up for the administration of the IEPF fund. The authority promotes investor protection and refunds unclaimed shares, dividends and other amounts transferred to it to the rightful claimants. IEPFA works under the administrative control of the ministry.
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