Unlocking Value: A Guide to Recovering Shares from the IEPF

Shailja Singh

29 May, 2024

In the past numerous cases have arisen where individuals could not claim their shares or receive dividends due to various reasons such as death, injury, or misplaced certificates. As a result, the unclaimed dividends or shares were transferred to the government, which utilized the funds for the country’s welfare. The government established the Investor Education and Protection Fund (IEPF) to facilitate this process. This blog aims to comprehensively understand the IEPF and guide individuals on recovering their shares. 

Understanding the IEPF

When shares, debentures, or bonuses remain unclaimed by shareholders for a certain period, they are transferred to the IEPF. The IEPF is a government body responsible for managing and recovering these unclaimed securities. It operates under the oversight of authorities such as SEBI (Securities and Exchange Board of India) and MCA (Ministry of Corporate Affairs)¹. The recovery process can be complex, and shareholders should seek the assistance of a reputable Share Recovery Consultant to navigate the intricacies involved.

The Role of the Best Share Recovery Consultant

Recovering lost and unclaimed shares can be challenging, given the various reasons behind their loss or unavailability, such as damaged certificates, expired records, improper transmission, or the death of a shareholder. The IEPF, in collaboration with SEBI and MCA, facilitates the recovery of their securities through a well-defined procedure. However, engaging the Best Share Recovery Consultant in India is highly recommended due to the complexities involved. These professionals possess the expertise and knowledge to expedite the recovery process and ensure a smooth and hassle–free experience for shareholders.

A Step-by-Step Guide to Claim Shares from IEPF

1. Familiarize yourself: Begin by downloading the instruction page to recover shares from IEPF’s official website of IEPF. This document will provide essential information before proceeding with the online application.
2. Fill out the application: To claim the share from IEPF, complete the IEPF-5 application form in the prescribed format and provide all relevant details.
3. Receive Acknowledgment: You will receive an automatic acknowledgement number or Service Request Number (SRN) upon submitting the online form. Keep this number for tracking the progress of your application.
4. Submit Required Documents: After completing the online form, submit it along with the supporting documents and the SRN to the Nodal officer/Registrar of the company for verification.
5. Verification and Report: The relevant authority will review your application and supporting documents within 15 days and issue a verification report. Based on this report, the IEPF account will initiate the refund to the claimant’s Aadhaar-linked bank account through electronic transfers. In case of any changes or modifications required, the form should be amended and resubmitted.
6. Claim from IEPF: Once the concerned authority is satisfied with the verification process, you can claim your shares from the IEPF account. The refund will be processed and transferred to your account at this stage.

Required Documents:

• Aadhaar card of the claimant and all shareholders
• Proof of entitlement (share certificate or application number, etc.)
• Cancelled cheque to claim shares from the IEPF account
• Passport, OCI, and PIO card 
• PAN Card for claiming shares from IEPF
• Dermat Account statement of the claimant(Client Master List)
• Death certificate (in case of deceased joint holders)
• Stamped receipt with the claimant’s and two witnesses’ signatures
• Indemnity Bond with claimant’s signature
• Non-judicial stamp paper (value based on the unpaid claim amount of Rs.10,000 or more) or plain paper for a refund of shares

Reasons for Lost and Unclaimed Shares

1. Mutilated Certificates: Damaged shares certificates due to mishandling can pose a significant obstacle to recovery.
2. Non-submission of Transfer Deed: Please submit the transfer deed despite payment from the buyer to ensure the claimant can file a claim. 
3. Incorrect Information: Providing incorrect or outdated personal information such as name, age, address, or marital status can lead to unclaimed shares. The IEPF provides a solution to rectify this issue.
4. Improper Execution or Submission: This can result in shares remaining in the seller’s name or difficulties handling shares on behalf of the deceased shareholders.
5. Jointly Held Securities: Jointly held securities, especially when one of the joint holders is deceased, can complicate the recovery process. However, recovery of shares from IEPF is possible with the guidance of a skilled advisory agent.
6. Multiple Holdings in Different Companies: Shareholders must follow specific procedures and documentation according to each company’s policies. 
7. Misplaced Shares and Dividends: In unfortunate circumstances, shares, dividends, or bonuses may go missing making it crucial to explore the option of claiming shares from the IEPF.
8. Signature Mismatch: Changes in a signature over time can result in signature discrepancies, making it challenging to claim shares. 

When is the Transfer of shares required?

Shares or unclaimed dividends that remain unutilized, unclaimed, or unpaid for 30 days from the declaration date are transferred to the unclaimed dividends account. If these shares remain unclaimed for seven consecutive years, they are subsequently transferred to the IEPF.

Conclusion

The IEPF is the designated government agency responsible for managing and recovering unclaimed shares and dividends in cases where their rightful shares, the IEPF provide a comprehensive recovery process. However, to ensure a smooth and efficient recovery experience, it is advisable to seek assistance from the best share recovery consultant in India, such as Enterslice. With its expertise, the complexities of the recovery process can be navigated effectively. Recovering shares from the IEPF requires proper guidance and adherence to legal procedures.

FAQs

Read Our Article: Recovery of Shares from a Company in Liquidation

1. https://www.mca.gov.in/content/mca/global/en/home.html