Getting Back Your Unclaimed Shares in United Spirits Ltd
Have you invested in United Spirits Ltd (USL) in the past but are currently unable to trace details of the shareholding? Chances are that due to your outdated contact information, dividend amounts over the years have remained unclaimed by you. Consequently, the company would have had to transfer such unclaimed dividends and the corresponding shares to the Investor Education and Protection Fund (IEPF) as per statutory norms.
However, you as the rightful investor have the option to reclaim these lost shares as well as past unpaid dividend amounts from the IEPF Authority through a transparent claims process. This article will simplify the procedures around this for you as a USL shareholder.
When Do Shares Become Eligible for Transfer to IEPF?
As per section 124(6) of the Companies Act 2013, equity shares against which dividend has remained unclaimed or unpaid for a continuous period of 7 years have to be transferred to the demat account of the IEPF Authority.
In case of USL, if you as an investor have not provided encashment details for consecutive 7 annual dividend payouts, the shares would get tagged for such transfer. Not receiving dividends itself could arise from change in address or nomination details that were not updated with the company or registrar.
How to Ascertain Unclaimed Shares?
Before proceeding with reclaim procedures, shareholders need to ascertain details of unclaimed dividends or shares already transferred to the IEPF against their name.
This can be done by checking via any of the following sources:
1. Annual IEPF Statements: Go through excel sheets (IEPF-6) periodically uploaded on USL’s website to check unpaid amounts against your name along with a tentative year of transfer to IEPF.
2. USL Investor Relations: Approach them to identify unclaimed dividends or shares transferred or pending transfer to IEPF providing your folio number or shareholder reference details. The Registrar and Transfer Agent (RTA) – Link Intime can also be contacted for this information.
3. MCA Portal: Use the search facility on the MCA website entering PAN details to identify unclaimed shares/dividends across companies tagged to your PAN.
Upon final determination of unclaimed dividends/shares, filing an online claim is the next step towards re-claiming your blocked assets. This is initiated by submitting form IEPF-5 to the Authority.
E-Filing of Form IEPF-5 with MCA
In 2017, the MCA introduced the mandatory e-filing of form IEPF-5 for expedient processing of refund claims from the IEPF corpus. This form has to be accurately filled online along with attaching scanned copies of requisite supporting documents. Follow the step-by-step guidelines below for hassle-free submission:
1. Register on MCA Portal:
Use your PAN details for self-registration. OTP ensures validation. An MC014***** registration number is generated which has to be used for subsequent logins.
2. Upload Documents:
Have scanned copies of PAN card, Address Proof (Aadhar), USL dividend warrants or demat statement showing shareholder status, Indemnity Bond etc. ready as these need to be attached to the form.
3. Fill Particulars:
Login and enter details – USL name, number of shares, amount to be claimed etc along with claimant details and upload documents. Nominations have to be specified if any.
4. Submit:
Pay refund fees of Rs 10/- per company (USL) through digital payment gateway. Verify details thoroughly before final submission which generates an SRN acknowledgment.
Timeline for Processing Refund Claims
The status of claims can be tracked using the SRN number through the MCA portal. The expected processing timeline after IEPF-5 form submission is:
1. Initial Scrutiny: 21 days
Preliminary deficiencies if identified are communicated via email for claimant response.
2. Final Approval: 90 days
Final approval or rejection intimation is provided within 3 months from SRN date.
3. Shares Credit: 30 days post-approval
For valid claims, shares get debited from the IEPF demat account and credited to investor’s demat within 30 days.
Reclaim your blocked USL shares now!
I hope this detailed guide gives you clarity on reclaiming any unclaimed equity shares in USL currently tagged under your name in the IEPF records. Furnish the e-form diligently attaching all documents for smooth approval. With some effort, the entire recovery process gets completed within 4-5 months enabling you to regain your lost assets. Stay invested!
Consequences of Losing Claim Over Shareholding
Before explaining the reclaim process, it is vital for investors to understand the repercussions of allowing shares to become eligible for transfer to the IEPF:
1. Loss of Dividend Income: The dividend payout against these shares would stop being credited from the time such shares get transferred to the IEPF. This leads to perpetual loss of an annual income stream.
2. Loss of Rights: Investors stand to lose all rights over assets like bonus shares, stock splits or other benefits that may accrue on these shares in future. Voting rights also stand rescinded upon transfer to IEPF.
3. Capital Gains Taxes: If such IEPF shares are sold in periodic bidding processes to recover administration costs, applicable taxes have to be paid by original shareholders. But sale proceeds do not come to actual shareholders leading to unnecessary costs.
4. Diminished Value: On sale of shares by the IEPF Authority to recover management costs, it may happen at undervalued price leading to loss for actual shareholders. Recovery gets harder with every passing year.
Hence it makes immense sense to claim back shares well before the 7 year outer limit for transfer rather than deal with the aftermath later on and struggle to get them back.
Determining Unclaimed Shares/Dividends
For shareholders who have not received dividends consistently over a long period, first need is to ascertain if they have any pending unclaimed amounts or if the shares itself have been transferred to the IEPF.
This can be determined by:
1. Browsing through periodic shareholder communications, dividend intimations that may reflect non-encashment for specific financial years.
2. Approaching the USL secretarial team citing registered folio number or DPID/Client ID seeking status on unclaimed dividends or shares tagged to the investor account.
3. Studying annual IEPF statements (IEPF-6) uploaded on USL’s website indicating shareholder name with corresponding unclaimed amounts pending for transfer to IEPF.
Upon final determination of the unclaimed shares/dividends status, necessary steps can be initiated by eligible shareholders for filing refund claims.
When Do Shares Get Transferred to IEPF?
Do note that as per section 124(6) of the Companies Act, if an investor fails to claim dividends against their shareholding for a continuous period of 7 years, such shares will be required to be transferred by the company to the demat account of the IEPF Authority.
For instance, for USL the eligibility would be – Mr. X has not claimed dividends declared by USL for FY 2015-16, 2016-17, 2017-18, 2018-19, 2019-20, 2020-21 and 2021-22 making his shares liable to transfer to IEPF upon declaration for FY 2022-23 unless the pending unclaimed dividends are recovered beforehand.
Prerequisites Before Filing Refund Claim
To facilitate seamless verification and approval of investor claims, certain documents need to be arranged before filing IEPF-5 form:
1. PAN Card: Self-attested photocopy of PAN card is mandatory.
2. Address Proof: Relating to current address of claimant – Aadhar or Passport.
3.USL Shareholder Proof: Share certificate numbers, USL dividend payment counterfoils or demat statements showing shareholder name and joint names if any.
4. Authorization: Required in case a claim is being filed through a representative or third-party tool on claimant’s behalf.
5. Other Documents: Canceled cheque leaf with printed name, Original indemnity bond on Rs 100 stamp paper, Advance receipt for amount to be claimed etc. as applicable depending on specifics of the claim.
Having these documents handy ensures completeness of e-form and faster processing.
Opportunity to Recover Past Dividends
While this article focuses on reclaiming unclaimed shares, do note that through the common IEPF-5 form, shareholders can also recover past unpaid dividend amounts pertaining to the concerned shares. The amounts get calculated automatically in the form basis inputs provided on corresponding dividends not having been received in particular financial years since 2013 onwards.
The cumulative amounts across unclaimed dividends and any subsequent accruals on the shares get directly disbursed to the claimant’s bank account post-verification. So do ensure unpaid dividend amounts are also applied for recovery over and above the shares through the composite form.
Tracking Status of Refund Claim
Post submission of duly filled IEPF-5 form and completion of preliminary verification within 21 days, the final approval takes around 90 days from form submission date.
The status at any point can be checked online using the SRN number on the MCA portal under the ‘Track IEPF-5/Refund Status’ option. Claimants should proactively track applications based on intimations received if any and respond swiftly to queries raised for timely processing.
For valid claims post requisite verification by nodal officers, USL shares get debited from the IEPF demat account and credited to the investor’s demat account as specified in the refund application within 30 days from approval date. The corresponding dividend amounts also get released to the bank account mentioned. Consolidate your holdings once again!
To summarize, USL investors can recover their shares and unclaimed dividends transferred to the IEPF by furnishing a detailed refund claim application in the prescribed manner enclosing all supporting documents accurately. Maintain eligibility documentation proactively and monitor claim status rigorously for seamless sanction of your legitimate assets back to your name.
Unclaimed Shares Worth Rs 40 Lakhs Recovered by NRI after 8 Years
Ramesh Kumar, an NRI based in Australia, had purchased shares of a reputed Indian conglomerate during an Initial Public Offering (IPO) in 2010 before shifting overseas for work. Over the years, he lost touch and track of this shareholding with the physical share certificates lying in his ancestral home back in India.
In 2018, when Ramesh returned to the country on a vacation and recalled this decade old investment, he was shocked that due to non-updation of his current address and bank details, the company had transferred this shareholding comprising 5,000 shares worth over Rs 40 lakhs to IEPF in 2016 owing to 7 consecutive years of dividends remaining unpaid.
Despite the anxiety, Ramesh studied the legal provisions around recovering unclaimed equity from IEPF and filed an online application using form IEPF-5 along with all requisite documents. As an NRI, he obtained his father’s authorization and notarized indemnity as Ramesh no longer had an active Indian bank account.
Within 3 months of diligently pursuing all formalities, Ramesh received confirmation that his entire shareholding had been credited back to his demat account. The intrinsic investment value along with 8 years’ of unpaid dividends was reclaimed successfully due to persistence and compliance with laid out procedures.
Legal Heirs Recover Family Silver Worth Rs 5 Crores after 15 Years
The Chaudhary family was in despair when the brothers Mahesh and Suresh died in a road accident without leaving behind nominations for their share portfolio worth over Rs 5 crores today, accumulated across IPOs during 1990-2000. The entire bouquet remained frozen with companies refusing to respond to requests from family elders for years owing to no formal paperwork.
In 2015, the family was advised to study legal resources under the Companies Act 2013 for transmitting shares to legal heirs. It emerged that beyond transmission struggles, over 5,000 shares worth Rs 50 lakhs purchased in a public sector company in 1998 had already been transferred to IEPF in 2010 since dividends lay unclaimed for over 7 years due to stalled transmission.
Through a specialized consultant helping approach the IEPF Authority, detailed documentation was gradually compiled over 18 months including succession certificates, family tree proofs and heir declarations from all siblings and offspring to conclusively establish rightful ownership across all heirs.
In 2017 approval finally emerged with the entire pooled shareholding getting transmitted into names of the legal heirs who could then seamlessly sub-divide based on nominee declarations guided by the late brothers’ inputs during their lifetimes. Persistence for over 15 years paid off in reclaiming the cherished family corporate assets.
Software Engineer Wins Back Stock Options after 11 Year Struggle
Rajeev Sharma, an IT professional had been granted out-of-turn stock option grants by his erstwhile employer DLF Ltd in 2006 in recognition of exemplary work. However, due to switching jobs and relocating cities frequently between 2008-2015, Rajeev lost touch with his DLF stock options worth over Rs 12 lakhs today that lapsed unexercised.
Neither did DLF have current contact details nor was Rajeev aware these options were due to expire with no reminders or intimations reaching him having changed addresses repeatedly. After the 7 year stipulated tenure, his unclaimed grants were extinguished and added to the pool of forfeited options.
A chance encounter with an ex-colleague in 2017 led Rajeev to discover that for employees whose stock options remained unclaimed beyond permitted timelines, there was recourse by way of approaching the IEPF Authority under rules notified by the Ministry of Corporate Affairs in specific cases.
On further research of eligibility, Rajeev pieced together his old employment documents, grant memos and termination approvals. He then filed form IEPF-5 under the ‘Employee Stock Options’ category with all attached evidence. To his delight, within 90 days the IEPF authority approved his appeal with DLF directed to issue fresh grants mirroring the expired ones in lieu of payments made at the time he had accepted the options in 2006.
Rajeev finally benefitted through sale of equity received by exercising the restored grants issued by DLF as if his options had remained live and never lapsed 11 years ago!
Senior Citizen Recovers Insurance Policy and Dividends after 25 Years
Murlidhar Sharma, aged 87 and suffering from diminishing memory had paid up premium towards a Unit Linked Insurance Plan (ULIP) policy as long back as 1996. Due to relocation and his advancing age, he had long forgotten about this policy purchased from MetLife.
In 2019, his daughter-in-law stumbled upon old billing files with premium payment slips towards this policy while cleaning out the ancestral cupboard. On further investigation, it emerged that beyond maturity proceeds from the policy itself, annual dividends from investments made through the ULIP also appeared to have remained unclaimed based on statements from MetLife tracked gradually using the limited details available.
The family approached the Investor Education and Protection Fund (IEPF) division office with photocopies of premium slips bearing distinctive numbers along with Mr. Sharma’s KYC documents. After verification of records confirming investor details via multiple written communications spanning over 12 months back and forth with MetLife and fund houses where corpus amounts totalling Rs 18 lakhs lay unclaimed, approval finally emerged in favor of Murlidhar Sharma.
25 years after initially buying the ULIP, the elderly investor received redemption proceeds along with dividends accumulated over decades through the IEPF refund process bringing joy amidst frail final memories demonstrating that it is truly never too late to recover unclaimed financial assets.
FAQS
1. What constitutes unclaimed shares that get transferred to the IEPF?
As per Section 124(6) of the Companies Act, 2013, shares against which dividends have remained unpaid or unclaimed for seven consecutive years or more have to be transferred by companies to the demat account of the IEPF authority. For example, if no dividend claim is received for FY 2014-15, FY 2015-16 up till FY 2020-21, such shares become eligible for transfer to the IEPF. Equity, preference, qualified institutional placement (QIP) shares across physical or demat form come under this purview.
2. What happens to corporate benefits like bonuses and dividends on such IEPF shares?
Any corporate entitlements accruing on such shares like stock splits, consolidations, mergers & acquisitions, dividends etc. will also get credited to the IEPF. Shareholders stand to irrevocably lose associated rights over entitlements arising on these lost shares until they reclaim them through prescribed processes.
3. How can investors identify and trace shares transferred to the IEPF against their name?
To determine status of pending or completed share transfers to the IEPF, shareholders can:
a) Check dividend/interest payment history records on whether 7 consecutive years reflect non-encashment.
b) Inspect company annual reports on IEPF balances disclosing names.
c) Use the MCA portal’s search facility entering PAN to identify shares already transferred.
d) Contact company investor relations teams providing joint holder details for status confirmation.
4. Is there a deadline to claim such transferred shares from the IEPF?
No, there is no limitation period to claim equity shares transferred to the IEPF. Shareholders deemed eligible can file refund applications seeking restoration of shares at any point subsequent to their transfer by the company. The shares continue to remain live though held in a consolidated demat account under the IEPF authority.
5. What is the process for shareholders to reclaim their equity shares transferred to the IEPF?
Shareholders have to e-file an online application using Form IEPF-5 available on the MCA portal along with attaching requisite identity and address documents as applicable to their category – individual, corporate, legal heir etc. This form facilitates refund of shares as well as payment of corresponding unclaimed dividends. Approval happens within 90 days after preliminary processing.
6. How are shares refunded to investors on successful claim approval?
On verification of rightful ownership, corresponding numbers of shares are debited from the IEPF demat account and credited to the demat account specified by the investor in the refund application form (IEPF-5). Monetary amounts towards unpaid dividends also get directly released to claimant’s bank account simultaneously.
7. Can a shareholder recover shares held jointly with others that got transferred to the IEPF?
For joint holdings, co-claim applications have to be submitted by other registered holders furnishing applicable KYC documents proving present address. Alternatively, a No Objection Certificate from other holders attested by a notary needs to be submitted enabling a single holder to claim the entire shares.
8. Are legal heirs of deceased shareholders eligible to recover their shares?
Yes, a legal heir or successor can submit a claim for shares and dividends that got transferred to IEPF against the name of the deceased provided supporting documents like death certificate, legal heir certificate and indemnity bond attested by other legal heirs are enclosed. NOC from other heirs may be solicited if required by authorities.
9. Can Power of Attorney (POA) holders submit claims on behalf of original shareholders?
If available POAs specifically authorize representatives to file applications, submit KYC documents, nominate bank accounts and handle such processes on behalf of original shareholders, applications through the POA route are permitted by authorities.
10. How can investors check the status of refund claims submitted to the IEPF?
Claimants can track the status of their online IEPF-5 applications using the SRN number generated at time of submission from the “Track Application Status” link. Current stage processing – first level scrutiny, second level verification or approval – can be tracked using this method to gauge expected timelines. Claimants have to respond promptly to any deficiencies conveyed to fast-track approval.
11. Does the IEPF authority have the right to reject shareholder refund claims? On what grounds?
Yes, the IEPF authority may reject claims providing justification if:
a) Claimant not rightful shareholder as per company records.
b) Supporting documents furnished do not conclusively establish claimant ownership rights over shares and dividends claimed.
c) Material discrepancy in claim versus shares actually held according to beneficiary position statements.
Authorization certificates, indemnity bonds, legal heir certificates have to be accurately furnished from all joint shareholders/claimants wherever required to prove entitlement.
12. Can shareholders transfer reclaimed shares immediately upon credit to their demat account?
While there is no locking period mandated, shareholders seeking immediate sale post credit have to fill out a declaration form available on the RTA/company website citing reasons for such quick liquidation. This helps authorities monitor genuine requirements like medical emergencies versus potential misuse. Know Your Client norms may still warrant explanations in certain instances.
In summary, keep track of investments, plan transmission of assets through nominations, ensure KYC is updated across holdings periodically, and seek assistance from investor relations teams to never let hard-earned shares become eligible for IEPF transfer due to lack of diligent compliance. Stay Invested!