Investors Education and Production Fund Authority (IEPF) came into being in late nineties. Following are the salient features
Till the year 2017 all unpaid and unclaimed dividends that have not been encashed for the past 7 years from the dividend declaration date may be transferred to a separate account maintained by IEPF.
Effective Sept. 2017 it is not just an Unclaimed Dividend, all the shares on which dividends have not been claimed for seven years are treated as unclaimed shares i.e., if dividend is not encashed for a continuous period of 7 years, then the shares on which such dividends remain unclaimed will also be transferred to IEPF A/c.
If, in the past 7 years bonus shares or split shares have been issued by a company, then such shares will not be transferred to IEPF, as dividend has not been unclaimed for the past 7 years. For e.g., 2017 bonus issued to Reliance Industries Ltd., will become dysfunctional only in the year 2024. Though the original shares will be transferred to IEPF in case the dividends are not claimed for the past 7 years, the bonus shares will still lie with the owners.
In order to claim the shares, we have to make application in Form IEPF 5. Only one such form can be claimed in a year for each company. If due to some reason forms are rejected, we have to wait for another one year.
While transferring the shares, old shares were cancelled, new shares were issued. They are treated as transmission of shares and then dematerialized in favour of IEPF. Now, there is difficulty in claiming lost shares. If these shares are transferred to IEPF, no one is sure how duplicate shares can be issued in case of shares that have been cancelled. Clarification from IEPF is still awaited on this account.Claiming shares and IEPF will prove to be very complex. Please contact us and you have any requirement.
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