Senior government officials say at least 2.5 million investors have not claimed their dividends. Unclaimed dividend payments worth Rs 2,000 crore lie with the Investor Education and Protection Fund Authority (PFA). Any payment that investors have not claimed has to be transferred to this Authority. The investor then has to claim it from the Authority. Senior government officials said there were at least 2.5 million such investors. Most of the cases relate to those who have shares in paper form and not dematerialized ones. A government official told Business Standard, “There are claims up to lakhs of rupees. Ninety-nine percent of such shares are in physical form.” In many cases, the official said that shares had not been transferred from the deceased’s name to the legal heir.
The Securities and Exchange Board of India (SEBI) has mandated all physical shares should be dematerialized by March 31 this year. Ankit Aggarwal, managing director of Alankit, a firm that helps investors claim dividend payments stuck with the PFA, said many people could not claim dividend payments from companies because their share transfer had not happened after the demise of the original shareholder. He said there are instances of signature mismatch in such transfers. He stated many had lost their share certificates. Experts said investors hardly had any awareness about claiming their dividend payments.
Investors are not claiming their dividends run into thousands, even in some Sensex companies. For instance, 3,329 investors have not claimed payments totaling more than Rs 11 lakh from Bharti Airtel for 2016-17. For example, in the case of Hero Motocorp, more than Rs 8 crore was not claimed for 2016-17. In the case of ITC, payments of more than Rs 32 crore have not been claimed for that year. For ONGC, 2,054 investors have not claimed their dividend payments for 2016-17. In the case of Bajaj Auto, it is 1,517 investors, and the dividend payments total Rs 4 crore.
The Ministry of Corporate Affairs established the IEPFA in September 2016 to administer investor education and protection funds under Section 125 of the Companies Act 2013. The Authority is also entrusted with refunding shares, unclaimed dividends, matured deposits, debentures, etc., to investors and promoting their awareness.
Procedure to claim dividend from IEPFA
1. An investor has to fill out a form available on the IEPFA website
2. Indemnity bond and other documents for proof need to be submitted to the Authority
3. The company will verify claim forms. Based on the company’s report, IEPF will release the payment electronically.
