Securities, dividends and debentures that remain unclaimed for more than seven years will be transferred by the companies to the IEPFA, which comes under the Ministry of Corporate Affairs. The agency will then oversee the processing of claims, with the companies playing a key role in verification and other aspects of the process.
Officials told ET that the latest plan was announced after Minister of State for Finance and Corporate Affairs Nirmala Sitharaman, after holding discussions with the complainants, directed authorities to stem the “systemic problem”.
Investors have pointed out delays in settlement of claims mainly due to time-consuming physical verification of several documents.
Top officials of the authority, including Chief Executive Officer Anita Shah Akela, will hold the first ever meeting with investors in Mumbai on Monday. Similar meetings will be held in Ahmedabad, Bengaluru, Chennai and Kolkata thereafter to address investors’ concerns. “The biggest complaint is that no one picks up their (applicants’) calls,” the official said. “A new five-digit short code is being tested and an improved IVRS (Interactive Voice Response System) and call centre will be launched on August 15, aimed at resolving investors’ queries regarding status etc.” Currently, the authority is holding meetings with applicants (Nibeshak Sewak Panchayats) every Monday to resolve grievances on the spot. Faster resolution mechanism
The ministry officials said they will enable the companies concerned to settle such claims soon after going through due process and getting approval from IEPFA.
The agency will continue to be the custodian of stocks and bonds, but if requested by a company, it will transfer unclaimed securities to the company and refund legitimate claimants.
Companies may be told to relocate within 15 days.
The agency circulated proposed rules to strengthen the refund process earlier this year and sought stakeholder comments. Officials said the rules are currently being finalized and will be communicated soon.
Currently, IEPFA verifies numerous documents relating to claims, claimants or their legal heirs, and issues refunds to beneficiaries after its affiliates recommend the transfer.
According to the latest plan, the ultimate responsibility for the transfer rests with the companies involved, who will carry out due diligence, verify the documents, confirm the legitimacy of the claims and the claimants, and release the transferred shares from the authorities. Thus, the companies will be held liable for any negligence.
However, authorities will be closely monitoring the reconciliation process.
In fiscal year 2023-24, IEPFA refunded 10.58 million shares to investors, compared with 7.65 million shares the previous year.
