“Rs. 10000 invested in Reliance in the year 1977 when its first IPO released would have made the investor a crorepati today.”
Yes! You read that right about recovery of shares. This information was revealed by none other than Mr Mukesh Ambani (Chairmen, managing director of the Reliance India Limited) in the Annual General Meeting of the company in 2017. Mr Ambani said,
“In just 4 decades, Reliance Industries has grown from a small startup to one of the largest, most admired companies in the world,”
“One thousand rupees invested in Reliance shares in 1977 is today worth Rs 16,54,503 – over 1,600 times more valuable,”.
Now, what do these figures mean to an average investor? The main thing we can interpret from this data is that if by chance anyone has an invested stock from 1977 then they could get rich by manifolds. This is where recovery of shares gains importance. In a recently released data by RIL, it has the largest no. of unclaimed shares or unclaimed dividend among companies in India. The details of the data unclaimed IEPF shares are given in the table after the following section. The obvious question here is
How does this unclaimed dividend come into being?
People generally tend to invest their money into various companies to reduce the risk of losing money. This seems profitable to the people but sometimes during the process, people tend to forget about their small investments and do not avail the dividends. The bought shares remain dormant for years with no one to claim. Sometimes senior citizens buy shares and forget to nominate an heir to shares before their death. This could lead to money unclaimed dividends or shares for companies.
Status of Unclaimed Shares of Reliance India Limited
Reliance Industries Limited is one of the largest companies in India and according to a recent report released by MCA, it also has the highest amount in unclaimed dividends. Even till 2016, RIL had almost 113 crores recorded as unclaimed dividends from investors. The reliance Industry limited has all the data of unclaimed dividends on its website. It has also urged most of its investors to claim their dividends and get the recovery of shares or refund of shares before RIL is forced to transfer the amounts to IEPF. The details of unclaimed dividends of the shareholders can be checked in the following link:
According to the latest released data by RIL, we can also see the transfer status of IEPF unclaimed dividends for various financial years in the following charts. If you want to study the information deeply you can access the documents from the source mentioned below the table.
Chart 1: Status of unpaid and unclaimed dividend for Reliance Industries in different years:
|UnclaimedDividend up tothe financial year 1994‑95||UnclaimedDividend forfinancial year1995‑96 to 2011‑12||UnclaimedDividend forfinancial year2012‑13 andthereafter|
|Transfer ofunpaid dividend||Transferred toGeneral RevenueAccount of theCentralGovernment*||Transferred toCentralGovernment’sInvestorEducation andProtection Fund(IEPF)||Will be transferredto IEPF within 30days of respectivedue date(s)(provided in Chart2 given below)|
|Claims forunpaid dividend||Can be claimedfrom IEPF aftercomplying with theprescribedprocedure under theCompanies Act,2013 (the Act)||Can be claimedfrom IEPF aftercomplying withthe prescribedprocedure underthe Act||Can be claimedfrom theCompany’s R&TAbefore therespective duedate(s)|
Furthermore to elaborate on what will be the value of reliance shares bought long ago in today’s scenario will be, let’s understand the following data,
- The market capitalization of Reliance has multiplied 5000- times from the year 1977 to 2017.
- Total assets increased from Rs. 33 crores to Rs. 700000 Crores.
One can simply conclude that owning a RIL share from the 80s would be the most profitable investment ever. Therefore, recovery of shares of Reliance is a profitable venture. Spending a small sum to get the lost shares is not a big deal considering the number of profits it will bring in terms of unclaimed dividend. Obviously, one would require legal help to claim all the lost shares. Especially in the scenario when an elderly have died without claiming the amount and their kin are laying claim on the amount. All the grandchildren might start asking for a share in the amount. This is where legal help can play a major role as they can help to get the will of the elderly to resolve the claim issue among the family members. A legal professional can also help in filing for the claim in IEPF.
Claiming Money through IEPF
Earlier, according to the policy of government these unclaimed dividends were transferred to the government which will use it further for public use. But the government later decided to set up an unclaimed dividend fund where the lost or unclaimed share of companies could be transferred. Any heir to the funds or people remembering their long-forgotten investment could file a report to the managing authority of the fund to claim their lost money and shares. With this concept in mind, the Government of India came up with the IEPF or Investor Education and Protection Fund.
Provisions of Investor Education and Protection Fund:
The Ministry of Corporate Affairs announced Investor Education and Protection Fund (IEPF) rules in 2017. The rules stated that any money which has been part of the unpaid dividend account of the company for seven years and has no claimant for the said duration must be transferred to the IEPF. The amount must be transferred to the fund with the interest for the same period. The said amount once transferred can only be claimed by a claimant after applying to IEPF. Therefore, the IEPF became a one stop destination for investors to lay claim on lost shares. it eased out the process of claiming refund of lost shares and provided investors an opportunity to avail their long lost investment.
Now, let’s understand the process of claiming lost shares or unclaimed dividends from shares of reliance transferred to the IEPF. The process mentioned in the upcoming section is a set of simple guidelines to claim refund of shares form IEPF for a common investor.
The Process to Get Refund of Lost Shares from IEPF:
Any person, whose shares, unclaimed dividend, matured deposits, matured debentures, application money due for refund, or interest thereon, sale proceeds of fractional shares, redemption proceeds of preference shares, etc. has been transferred to the Fund, may claim the shares under the provision to sub-section (6) of section 124 or apply for a refund under clause (a) of sub-section (3) of section 125 or proviso to sub-section (3) of section 125, as the case may be, to the Authority.
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.
- Particular of Applicant
- Details of Shares to be claimed
- Particular of Company
- Details of the amount claimed
- Aadhaar Number or PIO Card No. (in case of NRI/foreigners)/Passport/OCI
- Year-wise details of deposits/ securities.
- Aadhar linked bank account’s details (in which refund of claim to be made).
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.
Docs Required are as listed:
- Original Physical Share Certificate/ bond/ Debenture Certificate
- Indemnity Bond (original) with claimant signature
On a non-judicial Stamp Paper of the value as prescribed under the Stamp Act if the amount of the claim is Rs.10, 000 or more.
On a plain paper if the amount claimed does not exceed Rs.10,000.
In case of a refund of shares, on a non-judicial Stamp Paper of the value as prescribed under the Stamp Act.
- Advance Stamped receipt (original) with the signature of the claimant and two witnesses
- Copy of Aadhaar Card of claimant
- Print out of duly filled claim form (IEPF-5) with claimant signature
- Acknowledgement copy
- Cancelled Cheque
- Copy of Passport, OCI and PIO card (for foreigners and NRI)
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. The company has to appoint a nodal officer to carry out the verification process of the claim.
The Nodal Officer shall be solely liable for all actions of any officer appointed as Deputy Nodal Officer: In case a company fails to appoint Nodal Officer, every director of the company shall be deemed to be a nodal officer and be liable for any failure to comply with the requirement of these rules.]
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.
II. Verification report to the Authority:
The company shall within 30 days of receipt of claim form, send a verification report to the Authority in the format specified by the Authority along with all documents submitted by the claimant.
The Company shall attach the scanned copy of all the original documents submitted by the claimant in physical form duly certified by its Nodal Officer along with the e-verification report along with a scanned copy of both sides of the original physical share certificate or original bond or deposit or debenture certificate/s duly cancelled and certified:
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.
Time: An application received for refund of any claim under this rule duly verified by the concerned company shall be disposed of by the Authority within 60 days from the date of receipt of the verification report from the company.
If Submitted Application is Incomplete:
If the verifying authority finds the application incomplete or requires any other document to complete the verification, then they will write an email to the claimant mentioning the defects in the submitted form or details or any other required documents. The claimant is then required to submit the refurbished documents or other set of documents within 15 days of receiving the communication email form the authority. If the documents are not submitted on time, the authority can reject the claim application due to incomplete nature of documents. All the documents required again by the verifying authority must be addressed to the verifying nodal officer of the company. ensure that the documents reach the officer within fifteen days.
So, we understood the complete process of getting unclaimed dividends from a company. Shares of Reliance Industries Limited have risen manifolds in their value in the last few decades. Therefore, if you lay claim to shares lost or unclaimed for a long time then their value in the current times will be considerably higher. This is like finding unexpected gold buried in your ancestors’ land. However, claiming this lost moneyand recovery of shares requires filing documents and meeting all the requirements mentioned above. The easy workaround for this tedious process is to get the help of a legal firm that can do all the documentation and filing work for you. These firms can also guide through the complete process and make your job of recovery of shares easy. So, without waiting anymore, if you have any queries or recovery of shares/transfer related questions, find a suitable legal firm with experts and get guidance on recovery of your unclaimed investment.