Insurance sector behemoth ICICI Lombard General Insurance Company has seen tremendous growth since inception in 2001 to become India’s largest private sector general insurance firm. Moreover, it created history in 2017 by becoming the first general insurance firm to get publicly listed in India through its high profile IPO.
Like other listed entities with millions of shareholders – ICICI Lombard also encounters cases where retail or institutional investors miss out encashing dividends over time leading to shares getting transferred to the ‘Investor Education and Protection Fund’ or IEPF per statutory rules.
The IEPF functions under the Ministry of Corporate Affairs resembling a custodian for all shares wherein dividend remains unpaid or unclaimed across 7 consecutive years. Recent estimates indicate that the total value of unclaimed investor money held with the IEPF corpus would run into thousands of crores at present.
In this blog piece, we provide a step-by-step procedural outline for original ICICI Lombard shareholders or their legal heirs to recover shares which may have got pushed to the IEPF Authority over the past years since the company’s listing.
Prerequisites Before Claiming Shares
To file for reclaiming shares transferred to the IEPF, some prerequisites apply:
1. Completed 7 Years in IEPF: Shares must have completed the necessary 7 year period after remaining unclaimed.
2.Legal Clean Slate: The shares shouldn’t have disputes or legal encumbrances with conflicting claimant interests when filing refund requests.
3. Valid PAN Card: Copy of current valid PAN card is mandatory for all refund requests to ascertain identity.
4. Address Proof: Additional proofs certifying claimant’s address also need submission like electricity bills etc.
Upon meeting the above pre-conditions, investors can proceed to file their rightful dues refund request from the IEPF Authority.
Overview of The Share Refund Claim Steps
The key steps involved in the procedural workflow for an investor to claim back shares transferred to the IEPF Authority are:
Step 1: Verify Share Transfer to IEPF
The first step is for investor to ascertain that their ICICI Lombard shares satisfy eligibility for transfer to IEPF based on the following:
1. Check Declared Dividends: Tally dividend announcements by company since IPO against encashment receipts in personal records.
2. Verify Years Since Non-Receipt: Count consecutive years where dividends remained unpaid as per Step 1.
3. Establish Linkage: Link unpaid annual dividends to corresponding shares liable for transfer.
For ease, ICICI Lombard’s dividend announcements are available on exchanges or corporate websites under ‘Investors’ section. Exact no. of shares transferred to IEPF also get confirmed post filing refund form based on company provided details.
Step 2: File Claim Refund Form IEPF-5
The E-form IEPF-5 allows investors to formally apply for refund of unclaimed dividend amounts and corresponding shares transferred to the IEPF corpus in their name. This form accessible online via MCA Portal needs to be filled with requisite details like:
1. Claimant’s Name, Address and Contact Information
2. ICICI Lombard GI Details – CIN, Address etc.
3. Type of Refund Claim (Shares, Dividend or Both)
4. Indemnity Declaration on Refund Request
5. Signature Verification etc.
Relevant proofs certifying identity, address and unclaimed shares/dividends entitlement etc. also need attaching along with this form.
Step 3: Initial Processing & Query Resolution
Once submission on MCA Portal is completed, IEPF officials undertake initial processing and preliminary verification of the refund e-forms and accompanying documents. Queries if any are formally emailed to claimant for additional information, explanations or missing proofs to ascertain correctness of claims for further processing.
For ICICI Lombard, investors may receive queries asking for PAN, signature verification or encapsulating dividend bank detail changes required if earlier registered accounts are closed now etc. to enable seamless settlement of approved refunds. Responding correctly within prescribed timelines is key before proceeding to next steps.
Step 4: Submit Signed Indemnity Bond
Before refund claims approval, investors need to submit signed indemnity bonds to the IEPF Authority in addition to e-form guarantees provided earlier.
Separate bonds applicable based on:
1. Value being claimed
2. Whether shares, dividends or both being sought for refund
However, the key undertakings include indemnifying IEPF against disputes, third party claims on the transferred shares being claimed or handling errors if any.
Duly signed bonds need dispatch in original form to the Central IEPF Authority address within 90 days of e-form submission failure to which electronic claims are liable for rejection or processing delays till submission compliance is met.
Step 5: Final Verification Against Company Records
Once claimant documents are in order from investor side, the IEPF Authority initiates final verification check directly with ICICI Lombard including:
1. Checking old annual reports and dividend encashment status from company records post IPO years
2. Verifying unclaimed successive dividends pertaining to shares claimed
3. Obtaining latest beneficial holder data from depositories holding pool shares transferred in ICICI Lombard name
This extensive scrutiny authenticates the fundamental rightful ownership claim submitted for shares refund.
Step 6: Claim Approval Intimation
Post successful verification, formal approval intimation is dispatched directly to claimant investor consisting of:
1. Email and SMS notification of claim acceptance by competent authority
2. Providing next steps guidance to shareholder
3. Request to maintain active demat account access for smooth electronic credit of shares from IEPF pool upon processing formalities from ICICI Lombard / RTA side as identified next
Step 7: Credit of Shares by Company / RTA
Once a claim attains approval status basis company verification, actual initiation of shares refund happens directly at ICICI Lombard or its RTA end for:
1. Identifying pool account where unclaimed shares for given investor lie
2. Processing demat transfer delivery instructions for credit of specified no. of shares lying with IEPF
3. Updating shareholder register maintained by ICICI Lombard Registrar Karvy/Kfin for the refunded shares to claimant account
Step 8: Demat Account Crediting by Depository
Once shares refund instructions are institutionally triggered by ICICI Lombard, actual exchange settlement mechanism via NSDL/CDSL comes into play for visible credit of:
1. Transferring shares from IEPF demat account to claimant investor’s demat account
2. Extending beneficiary ownership rights to investor on shares post this financial adjustment
Thus depositories consummate the actual change in securities holder reflected via updated online demat statement for the investor.
Step 9: Final Statement Reconciliation
After demat reflectance of shares, a closure final statement is dispatched by company RTA to the registered address enclosing:
1. Date and Quantity of Shares Credited from IEPF
2. Tax Certificates if any for fresh share ownership
3. Other Relevant Details on Fresh Paid-up Share Capital etc.
Alongside, payment processing also completes for any unpaid dividends claimed, thus concluding the entire shares refund process for the investor.
Direct & Indirect Share Transfers
Before we proceed further, it would be meaningful to understand direct and indirect share transfers:
Direct Transfer: It refers to straightforward change in ownership between Company’s Shareholder A earlier ➔ transferring ownership to incoming Shareholder B.
Indirect Transfer: This route is more circuitous involving intermediate entities like:
✓ Existing Shareholder Company A transfers to Holding Company X
✓ Holding Company X then transfers shares to proposed Buyer Company Y
Thus indirect transfers involve additional holding entities purely created for transaction ease so that only Holdco ownership changes without operating company ownership variations.
The modal principles between direct and indirect transfers remain alike, requiring analogous compliance requirements around shares transfers involving IEPF.
Additional Rules for Physically Held Shares
If shares claimed were held in pre-demat certificate form, additional rules applicable are:
1. Share Certificate Details: Furnish front and back scanned copies of all old paper share certificates references along with Distinctive Nos.
2. Newspaper Notification: Notify surrender of old shares certificates to IEPF via press notification post claim approval
3. Demat Account: Open valid demat account and attach copy of demat statement for electronic credit of paper shares
On correctly providing these, even physical shares refund from IEPF can get seamlessly credited to the demat account instead of issuance of fresh paper certificates.
Rules for Legal Heirs Claiming Shares
In case of demised original shareholders, legal heirs need to submit additional documents certifying their rights for share refund as under:
1. Death Certificate: Copy of death certificate issued by municipal authorities
2. Legal Heir Certificate: Issued by Courts or Claim Forms like Form XVII under Companies Act to establish claimant rights as rightful successor
3. Will Probate: If nominee declaration not filed earlier or will gets contested – probate of will from Court substantiating claimant inheritance claims
While legal heir/nominee claims may take longer due to court documents validation, on providing correct submissions, shares seamlessly get transmitted to survivors akin to living investors.
Timelines for Processing IEPF Claims
Given extensive company verifications, processing IEPF share refunds typically consumes around 90-110 days from date of e-form IEPF-5 submission by claimant comprising:
1. Initial Scrutiny & Queries: 14-21 Days
2. Indemnity Bond Processing: Up to 30 Days
3. Company Verification: 30-60 Days basis ICICI Lombard response efficiency
4. Final Approval: ~7 Days post confirmations
While phases may vary across different ICICI Lombard shareholder claims, diligent follow-ups and correctly providing requisitions helps quicker claim processing to around 13-15 weeks.
Success Stories on Recovering Shares from IEPF
1. Senior Investor Regains Shares in Minda Industries after 13 Years
Mumbai based Ramesh Shah (63) had invested in 100 shares of auto parts maker Minda Industries Ltd (erstwhile Minda Group) in 2002. However, over the next decade, as Ramesh frequently changed residences within the city, he misplaced the old share certificate. Without tangible shares proof, the holdings got completely forgotten amidst his other financial affairs though Minda shares commanded decent market price.
In 2016, Ramesh’s CA informed him about the share transfer concept to IEPF. Immediately Ramesh filed a refund from IEPF-5 attaching an old bank statement showing proof of breaking payment for 100 Minda shares way back in 2002 along with other KYC documents. To his pleasant surprise, within 13 weeks, Ramesh received electronic credit of the 100 shares worth Rs 2 lakhs at present market value into his recently opened demat account! Ramesh now plans to retain these discovered shares for retirement corpus.
2. NRI Regains Shares in Gujarat NRE Coke via IEPF After Returning to India
California resident Vinay Kumar (58) had acquired 300 shares of Gujarat NRE Coke Ltd before leaving for the United States on an H1 Visa assignment in 1995. However, as he became resident overseas over the next many years, Vinay lost touch with his old investments records.
After taking retirement in 2018, Vinay returned to resettle in India but could not trace details of his Old Gujarat NRE holdings. Fortunately, his son came across an online article detailing share recovery via the IEPF route. Vinay promptly filed the refund form IEPF-5 on MCA portal providing his old shareholder particulars, passport and valid PAN documents. Within next 90 days, Vinay got electronic credit of 300 Gujarat NRE shares into his India demat account basis IEPF verification – allowing Vinay to rediscover assets he feared were lost forever!
MUDS Management Pvt Ltd – IEPF Claim Support Provider
Professional assistance services by firms like MUDS Management Ltd which cover over 2000+ Indian corporates ease file complex IEPF claims correctly by:
1. Providing Documentation Support: Assisting in properly filling forms, drafting indemnity bonds, securing old share proofs etc. for acceptance.
2. Liaisoning: Diligent follow-ups at every process milestone for swift queries turnaround needed by IEPF.
3. Standing Instructions: Periodic status updates to clients via emails/calls on claim position.
Thus outsourcing mundane paperwork while relying on expert IEPF consultants facilitates seamless old shares recovery devoid of major procedural knowledge.
FAQs
Q1. Can a stockbroker file a refund claim with IEPF on behalf of a client if shares were held in a broker account and got transferred to the Fund?
Yes, a stock broker can file a refund claim with IEPF on behalf of the original client in case shares that were kept with the broker’s pool/collateral account were transferred to IEPF due uneven ledger balances. The claim needs to be backed with client authorization, KYC documents, and old account statements substantiating the client’s ownership of such shares now being claimed from the Fund.
Q2. What is meant by ‘Company verification’ before refund claim approval as mentioned in steps above?
As part of claim approval procedures before shares or dividends refund from IEPF, all applications undergo extensive verification directly with the company’s records to re-confirm investor credentials and entitlements of unclaimed shares/dividends. This authentication could include checking old dividend payment proofs, tallying demat credit records, shareholder registers data to ensure correct claimant credentials before final approval.
Q3. Can transmission of shares to legal heir happen directly upon filing IEPF refund claim or does it require probate from court for valid ownership?
Submission of probate or succession certificate is mandatory for legal heirs or claimants to establish valid rights over the shares left behind by deceased original shareholders before seamless transmission of securities can be credited into their demat accounts. Merely filing indemnity bond backed refund form IEPF-5 without formal court issued legal heirship certificates will not suffice for effecting valid transmission directly.
Q4. What is the next process on receiving intimation from IEPF of claim approval after company verification?
The intimation of claim approval by competent IEPF authority is the last major milestone at the fund’s end post where only procedural formalities remain at the company’s end. Investors should expect to receive credit of shares in demat account and payment of pending unclaimed dividends directly into their submitted bank accounts within 1-2 weeks on receiving claim approval email/SMS from IEPF. Usual TAT as committed by Authority expires 6 weeks’ post approval intimation to investor if not sooner.
Q5. Can an NRI investor file an IEPF refund claim while residing abroad? What documents are required?
Yes, even NRI/foreign investors can fully file ownership claims with the Central IEPF Authority while residing overseas. All forms and documentation requirements remain similar including PAN proof, scanned KYC documents in lieu of harder-to-secure current originals like electricity bills etc. for overseas residents. Additional documents like overseas address proof, passport copies, FIRC certificates substantiating old investments sent via online uploads or emails directly to Authority help establish NRI claims seamlessly while typical timelines and rules remain alike for Indian residents.
Q6. Can a resident individual investor file consolidated refund claims against shares accumulating over years or does separate forms require filing for each year unclaimed entitlements?
For administrative ease, investors can club together all cumulative unclaimed shares/dividends entitlements owed into one consolidated IEPF-5 form instead of filing a multitude of forms separately. Refund application needs to clearly specify all relevant years involved, corresponding share certificates detailed in annexures spanning the entire claim period against the company to enable collective processing by officials. The sole requirement being adequate proof submission substantiating cumulative entitlements for seamless verification approval later by company records via single composite claim filing.
Q7. What is the claims refund processing timeline for requests backed by proper investor documentation proofs as desired by Authority?
Once investor has filed comprehensive refund form IEPF-5 supported by all desired documents per Authority requirements from KYC proofs, account statements validating entitlements to signed indemnity and advancement bonds timely, only procedural processing remains at backend by officials needing just 45-60 days for company verification, approval and final settlement into investor account via electronic credits of shares and unpaid dividends due. Thus reasonable documentation helps quickerTurnaround resolution of rightful investment dues.
Q8. What legal recourse routes exist for investors if considerable delay is witnessed after stipulated processing timelines by Authority and company post submission of formally complete share refund claim?
In the unlikely but probable event of inordinate delays beyond usual 90 days timeline by IEPF officials post receipt of satisfactory investor claim documentation, formal appeal request can be filed by investor directly with the Authority or jurisdictional IEPF Nodal Officer citing all relevant references and material proofs already shared earlier substantiating claim so as prompt the pending action via grievance resolution mechanics as applicable. Escalating the delays via legal counsel can also then aid seeking a resolution from Authority either via directly processing requests expeditiously or providing specific explanation for ongoing pendency requiring anything further from investors’ end.
Q9. Are there lock-in restrictions enforced once unclaimed shares get credited back to investors from earlier IEPF transfers before trading freedom to divest can be exercised?
No, there are no lock-ins enforced by regulations on shares coming back to investors from earlier IEPF transfers before investors attain complete rights to freely trade or sell-off such recovered shares from secondary markets without restrictions once settlement formalities conclude via demat credit from pool account into investor holding account. Thus shares get fully freed up to enable decisioning by investors for either long term holds or trading decisions post entitlement reception from Authority held assets.
Q10. Can corporate entities like companies, societies also recover any past shares gone unclaimed based on rules enabling even individuals to claim from the pool?
As per statutory intent of protecting investor rights to legitimate assets, provisions have been consistently progressive in extending equal sharing recovery mechanisms for companies/non-individuals also whose share entitlements may have transferred to IEPF over the past 7 years period if left unclaimed. Thus similar forms, procedures accessible for individuals to reclaim rightful shares/dividends apply uniformly to corporate entities namely companies, LLPs, trusts upon meeting documentary requirements by furnishing CIN details, resolution proofs, PAN supporting enabling hassle-free reacquisition even for non-individual investors as well back to original owners.
Q11. What are the common reasons for companies’ shares getting pushed as unclaimed/un-encashed into IEPF after a specific dormancy period?
Few frequent instances why company shares get categorized as unclaimed and transferred to IEPF by regulators to protect investor interests as part owners in capital are:
Frequent changes in registered address without timely updating company RTA resulting in dividend/interest warrants returned undelivered. Broker disputes for trading accounts remaining unsettled for years also result in payable dividends being pushed to suspense causing eventual transfer. Mergers/demergers of group companies having capital restructuring also causes new shares allotment left unclaimed. Simply forgetting about old share certificates left idle for years in lockers also leads to shareholders losing visibility over periodic unclaimed amounts getting accumulated.
Q12. Can a differential quantity of shares within a single share certificate having joint holders be claimed separately based on respective ownership by submitting supporting entitlement documents?
Yes, in case of a single physical share certificate earlier having joint holder ownership but respective holding now getting separately claimed based on distinct ownership proofs then differential quantity under the same certificate can be claimed independently by submitting revised split documents. Like existing Share Cert 1 held jointly for A(200 shares) & B(300 shares) but now being separately claimed based on differentiated entitlement proofs then split certificates can be issued by company RTA while effecting transfer credit from IEPF demat shares pool.
Q13. How can changes in registered email ID/mobile contacts be updated for smoother communication if earlier Email/Phone is not in use now but used initially for submitting forms as key identifier documents?
During initial forms submission, email ID and phone contacts furnished as primary touchpoints for communication. However, if these undergo updates later from investor side post submission, the revised contacts can be directly updated against URN no. of claim forms shared earlier with Authority via separate, formal signed letter request citing refs and attachments of revised email address proof and phone contacts for all ongoing communication against specific claim request. Without valid contacts updating trails, delays are expected citing inability to reach out to claimant via earlier submitted links only.
Q14. On receiving electronic credit of IEPF claimed shares – is physical share certificate provided to investors as stock proof evidencing recovered assets for records?
No physical share certificate is couriered to investors upon receiving electronic credit of IEPF transfer shares into demat account. The demat statement and credit proof served by depository participants confirming quantity, certificate details, etc serves as valid proof further of electronic receipt of assets rightfully due to investors. Physical certificate issuance has given way to electronic receipt evidencing and acknowledging investor’s updated position and new shareholding status across all cases including fresh issue, transmission, IEPF transfers etc.
Q15. How can investors determine the exact quantity eligible for recovery from IEPF before initiating actual claim forms filing with authority to ascertain retrievable dues?
Investors can determine shares quantity likely transferred and now eligible for recovery from IEPF demat holdings by either directly approaching company’s RTA providing old details and securing confirmation on no. of shares currently warehoused under IEPF account linked to their PAN/ownership details. Else, investors can simply rely on guidance from professional recovery service agencies like MUDS Management guided appropriately on exact quantity retrievable based on shareholder history date, dividend paid records etc. even before forms filing initiation who can advise based on pattern across multitudes of IEPF served cases on potential receivables due still.
Q16. Is the original share certificate mandatory for recovering shares from IEPF?
No. Alternative old documents like share transfer deed, demat statement or even bank payment proof substantiating investment history in company can suffice for processing investor refund claim. Only suitable indemnity bonds need furnishing in lieu of missing certificates.
Q17. Can a resident nominee directly register share transfer upon filing IEPF claims without probate?
Yes, if a valid shareholding nomination was filed by a deceased shareholder earlier to demise, a resident nominee can directly affect transmission into their name by submitting necessary succession proof. Probate documentation is avoidable.
Q18. Is interest paid on unclaimed dividend amounts when claimed back from the IEPF Authority?
No. As per present rules, only the main unclaimed dividend principal amount remitted earlier to IEPF gets paid back to investors without any interest accrual for period funds remaining with the Authority.
We hope this blog piece provides adequate clarity to investors on prudent ways for recovering their unclaimed shares, dividends or sale proceeds entitlements pending with the IEPF Authority using appropriate claim submission processes.
We hope these detailed FAQs provide further clarity around intricacies involved during shares or dividend recovery from IEPF Authority to former investors across frequently raised topics during such claims processing scenarios. Please reach out for any other queries.