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As part of strengthening the due diligence for Dematerialization of Physical Securities, the market regulator Securities and Exchange Board of India (SEBI) on November 5 asked listed companies to compile and submit data about shareholders holding shares in physical form to depositories by December 31, 2019

 

Companies or their RTA (Registrar & Transfer Agent) to provide a static database of their members to depositories:

All listed companies or their RTAs shall provide the following data (static database) of their members holding shares in a physical mode as on 31st March 2019 in a format which will be jointly decided by NSDL and CDSL

• the name of shareholders
• folio numbers
• certificate numbers
• distinctive numbers
• PAN etc

 

The deadline set by SEBI to provide the above information is December 31, 2019

 

Due Diligence process to be adopted by Depositories   :

• Depositories have to put in place systems to validate any dematerialization request received after December 31, 2019
• After December 31st, 2019, each DRN request will be validated against the Demat account holders' names as available in the records of the depositories.

 

Depository system to generate flag/alert in case of any normal mismatch in Physical certificate:

1. Any minor change in physical certificate name and demat account name  depository system will generate a flag
2. the following additional documents  explaining the difference in name shall be sought, 

• Copy of Aadhar Card
• Copy of Passport
• Copy of legally recognized marriage certificate
• Copy of gazette notification regarding change in name

 

In case of complete mismatch the applicant to approach issuer company or RTA :

If there is a complete mismatch the applicant can approach the issuer company or the RTA for establishing his or her ownership.

This welcome move by SEBI will ensure full-proof ownership of shares to the legal owner of those physical shares.

Author,

Vikash Jain

HR Head of a leading company had joined ITC as her first company and purchased few shares of the company, but then she lost track of her investment with the change in jobs and city. After many years she realized that she had made some investment in ITC Ltd, but had no clue about it. She approached Share Samadhan and we were glad to assist her. After thorough research, we could retrieve her shares details and to her surprise, a few thousand rupees invested around 20 years ago had turned into fortunes of around 25 lakhs. She could not believe when we told her the current value of her investments

But the problem started when we pursued the case because share certificates were not available with her, further her name had changed after marriage, her dividends were not claimed. Thus we started the process with the company and complied with all the formalities and multiple requirements of the company and could recover not only the shares but also the unclaimed dividend for the last 10 years. She cherished to have recovered the investment she made when she started her career with ITC. Like her, there are many investors who is struggling to recover their Lost / Forgotten or blocked investment. The following typical issues are being faced by Investors

• Lost Shares / Investments
• Mutilated shares
• Pending Transfer & Transmission of shares
• Unclaimed Dividend
• Unclaimed Shares
• Physical shares
• Unclaimed Provident Fund
• Unclaimed Matured Insurance
• Inoperative bank account

The Unclaimed Investment: We may call it a ‘black hole’ of investor wealth.  There are no takers for crores of money stuck up, literally! Various financial instruments such as Old Shares, Mutual Funds, Old Insurance, In-operative bank accounts, Provident Funds and post office deposits carry the ‘black hole’ of unclaimed money that nobody claims year after year.

Some data suggests that more than Rs 3.00 Lakhs crore worth of money is stuck up in shares which are in physical form.

If we notice beyond the capital markets, the amount is no less mind-boggling. A whopping Rs 60,000 crore is lying in equally crucial instruments of dormant bank accounts, unclaimed provident funds, post office savings schemes and matured insurance policies, Bonds, Debentures, etc. involving crores of investors. “This is such an issue that bothers every household. We prefer to ignore it despite the chronic presence in our daily life”

With whopping unclaimed investment in the country lot of fraud has been uncovered wherein the original investor’s money siphoned into the coffers of fraudsters.  To counter these frauds the Government has taken the following admirable initiative in recent past.

• Shares: As per the latest notification from Government, all shares in respect of which dividend has not been paid or claimed by the shareholder for 7 consecutive years or more, all these shares will be transferred to Investor Education and Protection Fund (IEPF) suspense account set up by the Central Government. This step by Government of India is a good move to stop fraud-related activity wherein instance happen in the past where old shares of shareholder whose dividend was not getting credited since a long time got fraudulently transferred to some other account. Good part where Government is concerned about protecting the wealth of the citizens hence they have provided the window to the investor to claim back from Government. Government is just holding and protecting the investment to avoid any fraudulent transfer of investors hard-earned money.

 

• Provident Fund: The government has reversed a five-year-old decision and announced that inoperative employees provident fund (EPF) accounts will earn interest, a move that will cheer millions of workers. The move will benefit more than millions of holders of inoperative accounts; over Rs43,000 crore is parked in such accounts.

 

• Depositor Education & Awareness Fund: The unclaimed amount with banks in the form of unclaimed savings or fixed deposit which remains with bank for more than 10 years goes to RBI in a fund called Depositor Education & Awareness Fund. As the Balance sheet of FY19 of RBI, the amount credit in this fund is around Rs 25,000 crore.  One can claim it back from bank even after goes to the fund with RBI but within 15 years from the date of transfer to the fund.

How to protect your wealth?

To avoid the scenario of Unclaimed Investment, One should keep a proper record of their investment whether in paper form or in electronic media. Someone in the family should be aware about all the investment made by the investor so that in case of exigencies, there is someone who can be dealt with those papers. One should also get the WILL  executed to avoid any future litigation.

 

Everyone’s Family Deserve to preserve their Investments so that the same can be help them to sail through a troubled time. Please do not let those investments just ruined in old papers. Convert it in liquid cash or keep in Demat if possible. But for other instruments details which are just lying in physical papers, in those cases what to do ? its a very big question mark.

Keep your investment document in Safe digital format with the company who can help in the transfer or transmission and can provide expert advice who can help you recovering your old investment. The investor must keep their investment details in digital format where data is encrypted (not visible to others without password or login). Without even giving them any investment document or disclosing the amount of investment one case store their investment related information in digital form so that the same can be recovered in even any contingencies such earthquake, fire or any other disaster or sudden death of the investor.

So happy investing, You deserve your money back. keep saving for future and plan in advance to protect the wealth from becoming a victim of any financial disaster.

Author,

Vikash Jain

Happy Investing

Please free to reach out to us at Samadhan@sharesamadhan.com

Since the date of new IEPF regulation came into force where-in the shares where dividend remained unclaimed for seven consecutive year then the respective shares will also get transferred to IEPF (Investor Education and Protection Fund). The IEPF authority is flooded with claim application and it is currently taking longer time to get the claim process due to various reasons.

Current Issues / Challenges to claim dividend / Shares from IEPF

• Movement of physical copy of claim document from Investor to verify claim
• Limited bandwidth at company end to process the claim
• Lack of detail information / coordinates where in IEPF authority can directly talk / communicate with the nodal officer of the company
• No tracking of physical papers from company to IEPF. In case the document gets misplaced during the movement from company to IEPF authority, it becomes very difficult to track the papers which unreasonably delay the process.
• Filing of claim for single polio in one financial year by the investor. Multiple folios not allowed in single financial year.
• No penal provision on the company for delaying the process
• No mobile / email verification system of the claimant who fills the form. This may lead to delay in process if there is wrong mobile or email id being inserted while filling the form.
• No provision as such for fraudulent claim.

IEPF rules have been revised recently with a view to streamline the process of IEPF

claim by Investor and also to fix the responsibility of the Nodal officer and company as a whole in the claim process.

The major highlights of the amendments which will be applicable i.e. 20th September, 2019

Introduction of E-Verification report:

The major amendment is that now company need to send an online verification report (E-verification report) to the authority and most importantly shall attach the scanned copy of all the original documents submitted by claimant with a scanned copy of both sides of original share certificate(s).

Further all the necessary documents such as Death certificate, succession certificate, Indemnity, Affidavit etc have to be attached along with form.

Thus the chances of loss of original documents in transit between company and Authority would reduce as was happening very often earlier.

IEPF-5 form will be transmitted online:

The IEPF claim form IEPF-5 will be transmitted online to the Nodal officer of the company for verification of claim.

This will help the Nodal officer to prepare the verification report as soon as he receives the online IEPF-5 form. Earlier he had to wait for the physical copy of claim documents from investor.

Proper KYC verification process to avoid fraud:

To streamline the process, to the IEPF Claim form more informative and to avoid any chances of fraud, the IEPF -5 form has been revised.

Now the mobile number, e-mail id and PAN have to be verified by the claimant through an OTP to avoid duplicity or fraudulent claim.

Appointment of Deputy Nodal offer for faster claim processing by the company:

Due to increase in IEPF claims, Authority has allowed the company to appoint Deputy Nodal officer for faster processing of claims.

Nodal officers are required to provide their details such as address, phone number, mobile number and e-mail id to the authority so that if there is any information required by authority from company, they can easily communicate with Nodal officer.

Allowing facility to file single form with multiple folios

Another major amendment which is also investor friendly is that now an investor claim file claim even for multiple folios held by him in a company. Earlier claim for only 1 folio was allowed in a financial year. This made investor helpless and had to wait for another financial year to file claim for multiple folios.

Resubmission in case of defective or incomplete document

Where the Authority, on examining any application for claim, finds it necessary to call for further information or finds such application or e-form or document to be defective or incomplete in any respect, the authority will direct , to company / claimant to re-submit such application or e-Form or document within fifteen days from the date of receipt of such communication.

Penalty for delay in processing of claim:

Further to fix the responsibility of company in a time bound manner, companies are now required to submit the E-verification report within 30 days of filling of claim and if the

Company fails to do so, company is required to pay a fine of Rs. 50/- per day, maximum up to Rs. 2,500/-.

Further Authority has been given discretion to reject the claim after sending a communication to claimant and company, if the verification report along with other claim documents is not received by Authority within 60 days of filling of IEPF-5 form. The authority may reject the form IEPF-5 after sending a communication to the claimant and the concerned company, on the e-mail address of the claimant and the company, to furnish response within a period of fifteen days

To prevent any fraudulent claim, Authority has also provided through this amendment that if any person fraudulently claims the investment, he shall be liable to be punished u/s 447 of the Companies Act, 2013 which have the provision of imprisonment from 6 months to 10 year and fine up to 3 times the amount of fraud.

With these welcome changes, we see smooth claim process from IEPF.

Happy Investing.

Should you have any query?

Please mail us at samadhan@sharesamadhan.com

D – 011- 4908 4015

011- 4908 4026

011- 4908 4002

www.sharesamadhan.com

 

Should you have any of the following question then please feel free to reach out to us at samadhan@sharesamadhan.com for any of the assistance

• IEPF CLAIM?
• IEPF claim of share
• How to claim my old share ?
• How to convert my physical shares  in to demat?
• How to claim shares  from IEPF?
• How to file IEPF CLAIM OR  IEPF refund for  share?
• How to resolve discrepancy in IEPF?
• How to claim lost shares , what will I do?
• How do I claim my forgotten shares ?
• How do I claim my deceased family member’s  share?
• How to get duplicate share ?
• How to get succession certificate for shares  of my family?
• How to get unclaimed dividend   ?
• Discrepancy in IEPF
• How much time it will take from IEPF claim
• Guaranteed IEPF
• Timeline for IEPF CLAIM
• Process of IEPF claim
• Office of IEPF CLAIM
• How to get refund of unclaimed dividend  from IEPF?
• How to get the shares of   in the death of the joint holder?
• How to get the shares  in case of nominee?
• How to get the shares ,   if the legal heir is minor?
• How to get the shares  after the death of shareholder where there is couple of legal heir?
• How to get the shares  when there is dispute in the family to claim the shares of deceased?
• How to claim the shares of   after the death of the trustee of the trust who was the shareholder?
• How to claim the shares  in case of death of shareholder?
• How to claim the shares  for NRI?
• How to claim the shares  for foreign personnel?
• How to claim the shares  in case of deceased NRI?
• How to Transmit shares from demat  ?
• How to claim shares from Unclaimed suspense account  ?
• How to demat shares  in case of mismatch of name ?
• How to update the Address or signature in company records for  ?
• How to demat the shares  if one of the joint holder is deceased ?

Agent of investment companies lure clients to sell their various deposit schemes but when investors or their heirs approach them to recover the money, they are not welcomed. The Investors or their legal heirs are forced to run from pillar to post for their rightful money and are often denied their rights. Share Samadhan is a platform for aggrieved clients and their relatives.

Delhi based Share Samadhan has launched ‘Bad Debts & Debtor Retrieval Services ‘for banks, resolution professional as well as official liquidator apart from its investment retrieval business.

The new service is part of the ‘Mission Money Back’ initiative of the company which was launched in the year 2011 to assist investors in getting the money back. Share Samadhan, backed by a battery of legal experts and reputed chartered accountants makes rigorous and sustained follow up of lost investments in shares, debentures, insurance, real estate, bank deposits, etc. The company, so far, claims to have recovered more than Rs 100 crores worth of lost investments for clients across all the asset class.

“We have a team of experienced professionals like Company Secretaries, MBAs, Charted Accountants, Lawyers, who have expertise in various laws, companies act, drafting complaints and follow up at suitable standards. We conduct in-depth research to recover the money of investors of far their legal heirs blocked in PF, Mutual Funds, Shares, Bank Deposits, and insurance, etc. We have served customers at National and International level, “said Mr. Abhay Chandalia, Founder Director of Share Samadhan describing his model to ensure recovery of investors’ money from various financial instruments like PF, Shares, Insurance, and Debtor, etc.

Mr. Vikash Jain, Co-Founder of Share Samadhan said “It’s very easy to invest in shares, insurance, banks, and properties but it’s quite difficult to get back your money in need. The agents of investment companies lure clients to sell their various deposit schemes but when investors or their heir approach them to recover the money, they are not welcomed,”. He further added, “The investors or their legal heirs are forced to run from pillar to post for their rightful money and are often denied their rights. We, at Share Samadhan, help the aggrieved investors to get their money back. “ He further informed that even a clue about any investment could lead to the recovery of entire legal money as our team is expert in data mining from various financial institutions, government organizations and autonomous bodies.

The company has recently opened its second office in New Delhi. Share Samadhan assists aggrieved investors to recover their Lost Investment/Forgotten Investments/Scattered Investments or Unclaimed Investments lying with private/listed companies, the government in the form of old shares, Mutual Funds, Unclaimed Insurance, Provident Fund, Bank Deposits, Postal Savings, the money blocked in debts. The company would be assisting the borrower of banks/NBFC by helping the borrower to recover money from their debtors/EMD/Security deposit/execution of awards/decrees. This would ultimately help Bank /NBFC to reduce their growing NPA.

SME MAXX and Share Samadhan on Wednesday announced a strategic alliance between two companies to cater to the unmet need of professional dues and investment recovery services for MSMEs.
The delayed realization of their bills and receivables is a common problem among MSMEs, leading to financial hardships and liquidity constraints- a key reason for many of them turning into non-performing assets (NPAs), affecting their sustainability.

While the government has taken an active interest to mitigate this problem by setting up the MSME Samadhan portal, most MSMEs have not been able to utilize the facilities due to lack of awareness or procedural expertise. The alliance will address this problem by providing procedural, administrative and legal support to MSMEs to recover their dues.

Lack of proper record keeping and succession planning among MSMEs has created a massive problem of unclaimed investments. The value of physical papers / unclaimed investment in the country is more than Rs 5 Lakhs crore. The Alliance will offer MSME owners and their successors a one-point registration channel on SME Maxx to identify and recover unclaimed assets.

“Through this initiative, we aim to achieve the twin objective of improving MSME cash flow and unclaimed asset recovery said Vikash Jain co-founder of Share Samadhan. “This alliance will strengthen our reach to a wider set of MSMEs in  smaller cities and towns who have little or no access to such facilities.”

Dr. Anand Bidarkar, CEO of SME Maxx said that “The combination of our fintech platform and Share Samadhan’s Proven expertise through this alliance will bring a much needed financial service to our SME partners.”
Besides the obvious commercial benefits, MSMEs utilizing the services of the Alliance will also be able to free up their bandwidth and resources on more productive pursuits. This will be a small but important step towards meeting the government’s goal of increasing SME contribution to the country’s GDP.