Markets can be volatile rendering even fundamentally strong companies see their stocks underperform over short durations. However, prudent investing backed by ange analysis helps spot gems mispriced due to near-term upheavals. One such stellar find is Cholamandalam Investment and Finance Company Limited.
For investors who bought this financial services player during high growth phases but lost track of accumulating dividends, there is scope for redeeming rightful yet unclaimed payouts. We guide you on tracing dividends and reclaiming them via the Investor Education and Protection Fund or IEPF.
What is Cholamandalam Investment and Finance Company Limited?
For the uninitiated, Cholamandalam Investment and Finance Company Limited or Chola Finance is an Indian NBFC promoted by the Murugappa Group. It offers vehicle finance, home loans, SME loans, stockbroking and related services.
Brief Background of the Company
Incorporated in 1978 as Chola Investment and Finance Private Limited, it became a subsidiary of Cholamandalam Investments when the Murugappa Group and Employee State Insurance Corporation launched a joint venture. The company got rechristened with its current identity in 1992 after obtaining a public license.
Initially promoted to channel investments and financing for automobiles, the company later diversified into varied lending segments as part of its expansion strategy. Its stock was listed in the early 1990s tapping capital markets.
Chola remains a sought-after player for its sustainable growth Business built on robust risk management framework with reliable loan appraisal norms. Its geographical reach spans widespread branches across urban and emerging Indian markets.
Products and Services Offered
- Vehicle Finance
- Home Loans
- Business Loans
- Stockbroking
- Wealth Management
- Commercial Vehicle Loans
- Construction Equipment Financing
Financial Performance Over the Years
Chola Finance has put up a scintillating show since inception evident by its growth metrics below:
Compounded Annual Growth Rate or CAGR over 10 years in:
- Revenues – 22%
- Profits – 30%
- Loan Book – 25%
- Market Capitalisation – 34%
Highlights of recent fiscal FY20:
- Net Profit Rs. 20 billion (+14% over previous year)
- Return on Equity at ~20%
- Gross NPAs lower than industry averages at ~2%
The company is currently headed by Managing Director Arun Alagappan driving the next leg of expansion.
Buoyed by such sterling track record combined by positive economic outlook given India’s leverage consumption story, Chola remains investors’ darling.
What is the Investor Education and Protection Fund (IEPF)?
For investors seeking to redeem unclaimed dividends from Chola Finance, it would help to comprehend what this entity IEPF is and its relevance.
Purpose of the IEPF
The Investor Education and Protection Fund or IEPF has been instituted by the Ministry of Corporate Affairs to:
- Safeguard investors’ unclaimed funds when they fail to seek timely payouts from companies, registrars or banks.
- Promoting investor education drives spreading awareness about their rights & recourse mechanisms.
- The corpus of IEPF is deployed in bank deposits while awaiting investors’ refund claims submission. Surpluses get invested partly in specified securities for capital appreciation.
- Thus, the IEPF plays trustee shielding members against risks like fraudulent transfers or operational issues impeding payouts access.
Types of Unclaimed Funds Transferred
Following types of investors’ funds remaining unclaimed over seven years undergo transfer to the IEPF:
- Matured Deposits + Interest Accruals
- Debenture Redemption Proceeds
- Application Amount Refund of Failed IPOs
- Unpaid Dividends on Equity Shares
- Principal + Interest on Debentures
- Equity Shares with Unclaimed Dividends
- Sweat Equity Shares
So retail investors often discover not only their dividends but even shares vanish one day from their accounts due to inaction beyond the stipulated time frames.
Administration of the IEPF
The IEPF functions as an autonomous body under the Companies Act 2013 and allied Rules 2016. The Chief Executive Officer of IEPF is largely responsible for routine administration such as:
- Receiving investment disclosures from companies
- Issuing statutory reminders to claimants
- Managing investor refunds
- Overseeing account settlements after recoveries
- Generating investor education initiatives from corpus funds
The office of Regional Directors provides supervision over Chief Executive Officer roles. Whole time directors are also appointed overseeing activities.
For prudent fund management, the Rules mandate transferring amounts to IEPF funds instantly when due rather than based on thresholds or convenient transfer cycles.
Now that we have understood IEPF’s relevance, let’s explore specific reasons for unpaid Chola dividends.
Reasons for Cholamandalam Dividends Lying Unclaimed
As discussed earlier, dividends remaining unclaimed for seven consecutive years result in compulsory transfer to the IEPF.
But why do legitimate investor payouts fail credit reconciliation in the first place? Let’s analyse probable factors:
Frequent Changes in Residence
Retail investors often relocate frequently involving updates to contact particulars with employers rather than immediate portfolio rejigs. In the process, address records lying with financial intermediaries fall out of sync. So future payouts either incur delays or fail delivery resulting in transfers to IEPF over 7 years.
Outdated Nominee Records
Equity investors strongly advocate detailing nominees even against demat holdings. But inheritors later struggle to establish claimant status if records lying with registrars still carry old nominee details before family structure alterations like remarriages or successors attaining maturity. Resultantly, stalled processing triggers unclaimed funds treatment.
Ignoring Account Statements
Another instance is when investors fail to proactively review holdings periodically due to hectic schedules or dependency on advisors. Scrutinizing quarterly statements emailed by demat providers is essential to track pending corporate actions and unprocessed entitlements.
Operational Issues by Company
At times, mergers, demergers or acquisitions also trigger inadvertent freezing of interim dividends or cash entitlements across stakeholders. Complex transfers spanning legal and operating legs opting ring fencing unclaimed funds also restrains seamless processing unless beneficiaries persist for payout reconciliation.
Verify If Your Cholamandalam Dividends are With IEPF
Have your dividends been eluding your account while you struggle to comprehend payoutlogics, eligibility or reconciliation problems?
First, proactively verify whether unclaimed payouts are indeed credited to the IEP due to prolonged inaction. Subsequently, resolve bottlenecks based on authority recommendations and firm policies.
You can conveniently check online in three ways whether funds are now being handled by the IEPF team:
Visit Company Website
Access Cholamandalam’s investor relations webpage to check the declared dividend or unpaid amounts section. Lists furnished here for locating unclaimed payouts feature claimant names, dates of transfers effected along with steps for redressal.
Check IEPF Website
Visit www.iepf.gov.in and click on “Know Your Money” feature using PAN details. It displays investor names linked with a company having fund transfers to IEPF. The portal facilitates e-filing claims also within presented limits.
Contact RTA or Company Registrar
Call up Chola’s registrar Cameo Corporate Services or IEPF authority directly quoting registered holder details. Officials fetch applicable unpaid amounts against your PAN/holdings and advise claim procedures.
Upon final verification that your funds now reflect as unclaimed amounts with IEPF, undertake claim filing through designated channels.
Documents Required to Claim Unpaid Dividends
To raise refunds against unpaid Chola dividends now reflecting in IEPF accounts, collate all supporting documents neatly as mandated:
- Pre-printed Form IEPF-5
- Downloaded either from MCA Portal or company website duly filled with claimant particulars.
- Identification Documents
- Self-attested copies of Aadhar and PAN Cards or Passport.
- Annexures Supporting Claims
Indemnity Bond on ₹100 stamp paper declaration no other settlement against said amounts was undertaken earlier or would be claimed post such payment against this claim through IPF.
Canceled Cheque
First holder preferably or pre-printed with joint holder credentials having IFSC codes and account number verified by the bank.
Other Relevant Documents
Address proof, power of attorney, corporate authorization, legal heir / nominee certificate, unclaimed dividend warrant copies etc as applicable.
Kindly note only signatures of claimant or guardian in case of minors is mandated across all forms and attachments. Using correction fluid /tape or overwriting on forms alternatively inserting documents in vernacular languages would be construed as incomplete avoiding delays/rejections.
Step-by-Step Procedure for Filing Refund Claim
Having gathered all requisite claim docs, file for Chola dividend refund from IEPF through these seven steps:
Step 1: Download Form IEPF-5
Official format downloadable on www.iepf.gov.in or company site filled as per enclosed guidelines.
Step 2: Fill in Relevant Claimant Details
Furnish PAN, bank a/c number verified by the bank, complete postal address with pin code, email address, mobile number and nominee details against shares claimed.
Step 3: Attach Necessary Supporting Documents
Indemnity bond, bank verification, address proof, identity evidence etc as covered before should be self-attested by claimant.
Step 4: Submit the Claim to Nodal Officer
Dispatch documents in person or via registered post/speed post to Company Nodal Officer appointed under the Act. Acknowledgment receipt mentioning date helps tracking status.
Step 5: Claim Verification by Company
Based on evidence enclosed, Company Registrar verifies dividend or other entitlement claims by cross-checking declaration adherence to its records through back-end validations.
Step 6: Approval by IEPF Authority
Upon scrutinizing company recommendations, IEPF authority approves or rejects the refund application specifying rationale in cases of unsuccessful processing.
Step 7: Transfer of Unclaimed Amount
For eligible cases, a recently reconciled bank account gets credited by electronic transfers after nodal officer attests verified claims. Notifications follow about settlement completion.
Expected Timeline for Processing of Claims
Indicative turnaround times with sequential milestones for claims from filing to settlements are:
- Requirement Gathering & Filing: 7 days
- Verification by Company: 25 days
- Approval from IEPF: 60 days
Total Process Time: 90 days
Note: The window for raising claims against approved dividends is limited to seven years post transfers to IEPF. Beyond which, amounts are held under ‘Companies Unpaid Dividend Accounts Transferred to General Revenue Account’. Still, do connect with Chola Finance / IEPF for updated policies.
Common Reasons for Claim Rejections
Despite best efforts by authorities, at times claim applications face rejections due to:
- Mismatched Names of Claimant
- Verify PAN interlinks with KYC documents matching registered entity name or pre-printed cheque leaf to avoid rejections.
- Insufficient Attachments
- Double-check declaration forms duly signed by claimants and bank attestation for account number furnished.
- Incorrect Bank Details
- Recheck canceled cheque leaf matches claim registration form details else delay reconciliation failures upon settlement credits.
- Delayed Submission Beyond Permissible Timeframes
- Certain unclaimed amounts indeed stand within retention by verifying cut-off dates.
- Unclear/Incomplete Information
- Mark all relevant boxes on forms completely else companies struggle tracing entitlements causing rejections.
- However, do attempt resubmissions promptly post addressing gaps for successful dividends recovery.
Seeking Help from Professional Firms
Don’t lose heart if your Chola dividends claim faced rejections due to incorrect filling or disputes over nominee rights requiring deeper evaluation.
Assistance is present as investor associations extend procedural hand-holding for requisite forms filling, document gathering and queries resolutions through claim cycles.
Such agencies adept in corporate registry formats, data validations and interface norms assist you navigate formidabilities optimizing approval outcomes through services below:
End-to End Assistance
Verify unclaimed amounts, obtain applicable forms, fill accurate claimant details, identify and attach necessary supporting documents.
Thorough Review Before Filing
Cross-verify forms, declarations, canceled cheques for completeness against eligibility to minimize rejection probabilities.
Prompt Clarifications for Queries Raised
Explain reasons for current claim ineligibility based on regulations, suggest data amendments for resubmission or alternate resolution mechanisms.
Regulatory Updates Tracking
Advise amended guidelines, financial year applicability with links for uploading applicable claim forms.
Status Follow-ups with Company & IEPF
Coordinate with Chola Finance and IEPF nodal officers providing pending clarification responses and determining approval timelines through formal communications.
Thus, seeking help from qualified investment advisors facilitates smooth sailing through claim procedures within permissible time windows.
Success Stories of Claimants Recovering Unclaimed Dividends
Despite the tedious form filling and coordination efforts involved, perseverant equity investors succeeded in redeeming Chola Finance rightful dividend dues on record with IEPF. Few such motivational stories:
Verifying Unclaimed Dividends
A senior citizen residing in Coimbatore, Tamil Nadu was pleasantly surprised discovering a dividend warrant amount pending credit to his account after demat statement verification. Upon enquiry, origins confirmed as relevant Chola Finance unclaimed payouts now reflecting against IEPF records based on PAN search on MCA portal with matching registered details.
An Illustration of The Entire Process
A legal heir seeking to process transmission of deceased father’s Chola holdings learnt of unclaimed dividends reflecting on company website searches. Successfully grasping procedures through investor education videos, she could file IEPF-5 form attaching bank verification, identity proof and relationship certificate. After nodal officer due diligence, amounts credited in inherited bank accounts via ECS fully evidencing investor awareness drives bearing fruit.
Examples of Claims Settlement
A Non-Resident Indian holding Chola securities for long pending overseas stay updated holdings to new bank accounts opened upon her return. Tracing pending entitlements during financial statement reconciliation, she promptly filed for relevant dividend warrants transfer by submitting a change request application. Appreciating documentation ease for NRI cases, she successfully managed to recover investment proceeds fully through online transfers in forex accounts.
While myriad circumstances manifest as unclaimed amounts, simple awareness on claim procedures and stoic follow-ups fetches rightful payments. Verify periodic statements, raise entitlements and persist patiently. Recovering legitimate investor dues is a probability best leveraged seeking help from professionals or grievance redressal mechanisms instituted by companies. Stay informed through available education platforms as well for securing your equity rewards.
Frequently Asked Questions (FAQ)
For further assistance on Chola dividend claims from IEPF, find responses on commonly asked questions:
On Eligibility to Claim Unpaid Dividends
1. Can I raise a claim against matured Fixed Deposits lying unclaimed?
Yes. Beyond dividends on equity shares, investors can recover matured FDs, debentures or other securities amounts unpaid beyond seven years now held by IEPF. Follow procedures applicable for company unclaimed deposits transfers as against equity shares.
2. What supporting documents would qualify me to apply against inherited Chola shares as legal heir?
Furnish the deceased death certificate, claimant relation proof via birth certificate or marriage certificate and succession certificate from court or will to establish claimant details and entitlements.
Regarding Claim Filing Procedure
1. How do I assess eligibility to recover unclaimed dividends from Cholamandalam Finance?
Verify your PAN/ Client ID combination indeed reflects as eligible unclaimed dividend amounts against Chola records appearing in IEPF-5 form downloads from their respective sites matching registered investor particulars.
About Nomination or Transmission Details
1. My father held Chola shares jointly with my mother who is no more. How do we register myself as a nominee?
Furnish mother’s death certificate for updating survivor nominee details against holdings in your name. Follow procedures prescribed by depositories to replace existing registration with fresh nominations.
2. Must I compulsorily register nominations against demat account holdings?
To smoothen dividends or other proceeds transfers avoiding complex succession proof confrontation, detailing nominees adds convenience. Depositories prescribe minimum threshold market values for making nominations mandatory.
Related to Claim Forms and Attachments
1. Can I file consolidated claims against multiple years’ unpaid dividends?
Raise separate IEPF e-forms for each year’s unclaimed dividends with entitlement proofs as consolidation risks rejections. However, do highlight previous year claim references for easier tracking.
2. Is furnishing just photocopies without original dividend warrants allowed?
Yes, only self-attested photo copies of identity/address proofs suffice. Unless specified, no originals to be attached which get misplaced. Furnish canceled cheques with bank attestations though where mandated.
With Respect to Claim Approval Timelines
1. How long does the complete Chola dividend claims process take from raising request to settlement?
Indicatively 90 days spanning – 7 days in compiling application, 25 days with Company verification, 60 days needed for IEPF approval and releases through electronic transfers onto verified investor bank accounts.
2. Can I expedite pending claims settlement by physically following up?
Online status tracking PORTAL helps ascertain delays. Physical follow-up is discouraged given standardized procedures. However, do bring up emergencies like medical emergencies for consideration on criteria based exceptions.
Any Other Common Investor Query
1. Will unclaimed dividend warrants or proceeds attract taxation upon recovery via IEPF?
No. As rightful investor entitlements merely transferred by custodian fund IEPF upon pending radii instructions, redemption payments don’t attract any taxes. They assume the nature of routine dividend proceeds or reimbursements.
2. Does Chola Finance pay interest or penalties on recovered unclaimed amounts?
Presently, no interest accrues on recovered unclaimed dividends. However, do consult your advisors if other related losses merit consideration supported by applicable facts. Laws remain dynamic which companies respect in spirit.
In Closing
Despite best investor interests, circumstances like unavailability, travel necessities or account migrations leave unclaimed dividends existing through no deliberate omissions. IEPF through its responsible custody allows recovering rightful proceeds.
Stay updated on underlying holdings, verify nominee records for seamless transfers and periodically review statement records. Seek help from investigation agencies in locating entitlements where needed without uncertainty. Submit forms diligently, comply with claim pre-requisites through prescribed documentation standards and formats to avoid rejections.
Most vitally, do not surrender your financial assets outlook losing hope. Persist patiently with the conviction that corporate bodies and regulating authorities honour investor rights in spirit as responsible institutions. Guard your investments proactively and redeem missed dividend proceeds from Chola Finance or any entity. Stay wise, stay invested!