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A Step by Step Guide to Recovery of Shares from IEPF

“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” 

– Robert Kiyosaki

There are many people who invest money into shares and forget about it or their elders who have invested any amount do not claim that money before their death. Now, this money might remain unclaimed for years. The Ministry of Corporate Affairs (MCA) came out with Investor Education and Protection Fund rules in the year 2017 to ensure that the dormant money lying in form of unclaimed shares can be transferred to the rightful heir efficiently. The rules state that any amount which is part of the Unpaid Dividend Account of a company for more than 7 years should be transferred to IEPF which will handle the claims on these funds thereon. 

Steps to Recovery of Shares or Unclaimed Money from IEPF

Step 1: Claimant to Authority

A claimant has to apply to MCA through IEPF Form-5 with details of their particulars, company, and shares to be claimed. 

Step 2. Claimant to Company

After filling the online refund form, the claimant should send it to the Nodal Officer of the concerned company with attachments like indemnity bond, original receipts and certificates related to matures deposit or debentures, etc. these will help in verification of claim with the company. 

Step 3. From Company to Authority

A company has to create a claim verification report within 15 days of receiving the claim form along with documents and send it to the authority in the prescribed format of the authority. 

Step 4. Grant of Claim by Authority

The authority will grant the claim to the claimant after verification of all documents and the form sent by the company. 

If the claimant has claimed shares, then the sanctioning authority will order a refund to be paid to the Demat account of the claimant. If there is any amount, then it will be transferred to the bank account of the claimant. Normally, the authority disposes of claims within 60 days of receiving the verification report from the company.

Author: Adv Sharlee Garg
Muds Management Private Limited
Mobile number: 91-9599653306
Email id: sharlee@muds.co.in

*The content of this article is intended to provide a general guide to the subject matter. Specialist professional advice should be sought about your specific circumstances. The views expressed in this article are solely of the authors of this article*

By | 2020-10-16T17:50:03+05:30 October 16th, 2020|SEBI|0 Comments

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