Securities, dividends and debentures that remain unclaimed for more than seven years are transferred by companies to the IEPFA under the Ministry of Corporate Affairs. The authority then oversees the settlement of claims, with companies playing a key role in verification and other processes.
The latest plans come after Finance and Corporate Affairs Minister Nirmala Sitharaman directed the authority to prevent “systemic problems” after holding discussions with claimants, the official told ET.
Some investors are flagging the delay in settlement of claims, mainly due to the time spent in physical verification of some documents.
The authority’s top officials, including chief executive Anita Shah Akela, will hold their first meeting with investors in Mumbai on Monday. Subsequently, such meetings will be held in Ahmedabad, Bengaluru, Chennai and Kolkata to address investor concerns.
“The biggest complaint is that no one is picking (claimants’) calls,” the official said. “A new five-digit short code is being tested and an improved IVRS (Interactive Voice Response System) and call center will be opened on August 15. This will be aimed at addressing queries about investor status etc.”
At present, the authority meets every Monday with the claimants (Nivesh Sevak Panchayat) to resolve the grievances on the spot.
Faster settlement mechanism
The official said the ministry would soon enable the concerned companies to settle such claims by following due processes and after obtaining the approval of the IEPFA.
While the Authority will continue to be the custodian of the shares and debentures, it will, on the request of the companies, transfer the unclaimed papers to the claimants for subsequent refund.
Companies may be directed to transfer them within 15 days.
Earlier this year, the authority had circulated draft rules to speed up the refund process and sought comments from stakeholders on the same. This has now been finalized and will be notified soon, the official said.
Currently, IEPFA gives refunds to beneficiaries after the company concerned recommends transfer, after verification of scores of documents relating to claims, claimants or their legal heirs.
According to the latest scheme, the final responsibility for the transfer will lie with the companies concerned, who will do due diligence, verify documents, verify the genuineness of the claims and claimants and release the shares after the authorities transfer them. Therefore, the companies will also be held liable for any damages.
The authority, however, will closely monitor the settlement process.
In 2023-24, 10.58 million shares were returned to investors through the IEPFA, as against 7.65 million in the previous year.
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