Regulation of the Investor Education and Protection Fund (IPEF)

The Investor Education and Protection Fund regulations 2017 by the Ministry of Corporate Affairs (IEPF). The IEPF must receive funds remaining in the company's unpaid dividend account after seven years with no claimant. The cash must be sent to the fund, and the interest accrued over the same period. A claimant can only get the transferred funds after filing an IEPF application. As a result, investors intending to submit a claim for missing shares can now do so through the IEPF. It makes the procedure more hassle-free and as well for the reimbursement for lost shares and makes it possible for investors to regain their long-lost assets.
Affidavit, indemnity & surety bond, original copy of FIR of a complaint filed disclosing a loss of share certificates, voucher copy of advertisement announced in the government gazette publication regarding loss of share certificates, and original copy of FIR should all be sent to the company/registrars if shares get lost.
Let's now discuss how to obtain missing shares or unpaid dividends from Kotak Mahindra shares donated to the IEPF. An investor can use the process to ask for the IEPF to recover shares.

The Procedure for Obtaining a Recovery of Shares from the IEPF

Any person whose securities, matured deposits, matured debentures, unclaimed dividends, matured deposits, application money due for refund or interest thereon, proceeds from the sale of shares, proceeds from the redemption of shares, or other property which has been transmitted to the fund may claim the securities or apply for restitution following section 124 sub-section (6).

Step 1: Claim to Authority

• An IEPF Form-5 with the claimant's information, the firm, and the shares to be claimed must be sent to MCA.
• Information about the Applicant Information about the Shares to be Claimed
• Company Information
• Information on the claimed amount
• Aadhaar, PIO Card Number, Passport, or OCI (in the case of NRI/foreigners)
• Securities and deposits are separated by year.
• Information about the Aadhar-linked bank account (where the claim refund will be made).

Step 2 Claim to Company

The claimant should submit the online refund form, along with any attachments (such as indemnification bonds, original receipts, certificates related to matured deposits or debentures, etc.), to the Nodal Officer of the relevant firm after completing it. These will help the company in confirming the claim.

The following necessary papers are required:

• With the claimant's signature, the original share certificate, bond, or debenture certificate
• A non-judicial Stamp Paper of the value stipulated by the Stamp Act must be used if the claim is for more than Rs. 10,000.
• If the total amount is less than Rs. 10,000, the Stamp Act requires that the amount required for a share return be stamped on a non-judicial Stamp Paper.
• Original advance stamped receipt signed by the claimant and two witnesses
• The claimant's Aadhaar card in digital form
• Print out the IEPF-5 claim form filled and signed by the claimant.
• A copy of the acknowledgement
• Cheque Copies of revoked passports, OCI cards, and PIO cards (for foreigners and NRI)

Step 3. Submit to the Authority

Within 15 days of receiving the application and supporting Paper works, a business must produce a claim verification report and submit it to the authority in the manner specified by the authority. The company must designate a nodal person to verify the claim.
Let's say a company does not designate a Nodal Officer. In such event, each director of the company shall be deemed a Nodal Officer/ registrar and shall be entitled to any breach of the provisions of these Regulations.

Step 4. Claim Grant by Authority

After the authorities have examined the paperwork and claim form provided by the corporation, the claim will be granted to the claimant.

Step 5. Verification report to the authority

• The company must provide a verification report to the authority within 30 days of receiving the form, along with any supporting Paper works supplied by the claimant.
• The company shall produce a scanned copy of the original physical share certificate or the original bond, deposit, or debenture certificate that has been duly cancelled and certified in addition to the e-verification report:
• The sanctioning authority will direct a refund to be issued to the claimant's Demat account if the claimant has claimed shares. The authority must settle the disputes within 60 days after receiving the verification report from the company.
• Time stipulation: Within 60 days after receiving the company verification report, the authority shall assess the application for reimbursement of a claim under this rule and duly validate the same.