Procedure for transferring shares to IEPF

Section 124(6) of the Companies Act, 2013 (Act) provides that all shares in respect of which dividend has not been paid or claimed for 7 consecutive years or more shall be transferred to IEPF. In case any dividend is paid or claimed for any year during the said period of 7 consecutive years, the shares shall not be transferred to IEPF.

If there is a specific order of Court or Tribunal or statutory Authority restraining any transfer of shares and payment of dividend or where shares are pledged or hypothecated under the provisions of the Depositories Act, 1996, such shares not to be transferred to IEPF.The Company to file Form IEPF-3 within 30 days from the end of financial year, furnishing details of such shares.

The due date for transfer of shares, where the period of seven years has been completed or being completed during the period from September 7, 2016 to October 31, 2017, shall be deemed to be October 31, 2017

Procedure for transferring shares to fund:

• Shares to be credited to DEMAT Account of IEPF Authority within 30 days of such shares becoming due for transfer to IEPF.

• The transfer of shares by the companies to IEPF shall be deemed to be transmission of shares and the procedure for transmission of shares to be followed while transferring the shares to IEPF.

• Board of Directors shall authorize Company Secretary or any other person to sign the necessary documents for effecting transfer of shares to IEPF.

• Company shall inform, at the latest available address, the shareholder concerned regarding transfer of shares three months before the due date of transfer of shares to IEPF. Such details shall also be posted on website of company.

• Simultaneously, Company to publish a notice in a leading newspaper in English and regional language having wide circulation informing the concerned that the names of such shareholders and their folio Number or DP ID and Client Id are available on their website duly mentioning the website address.

• Company to communicate the contact details of the Nodal Officer duly indicating his or her designation, postal address, telephone and mobile number and the company authorised email id to the IEPF authority, within 15 days from the date of publication of these rules and the company shall display the name of the Nodal Officer and his email Id on its website.

• If the shares are dealt with in a depository-
  • Company to inform CDSL and NSDL by way of corporate action requesting them to transfer the shares to the demat account  of  IEPF authority.
  • On receipt of such information, the depository shall effect the transfer of shares in favour of DEMAT account of Authority.

• If shares are in physical form-
  • The Company Secretary or the person authorised by the Board to make an application on behalf of the concerned shareholders, to the company, for issue of new share certificates.
  • On receipt of the application, a new share certificate for each such shareholder shall be issued.
  • It shall be stated on the face of the certificate that “Issued in lieu of share certificate No….. for the purpose of transfer to IEPF” and the same be recorded in the register maintained for the purpose (Form No. SH 2).
  • Particulars of every share certificate shall be in Form SH-1.
  • After issue of a new share certificate, the company to inform the depository by way of corporate action to convert the shares into DEMAT form and transfer in favour of the IEPF Authority.

• The company shall make such transfers through corporate action and shall preserve copies for its records.

• While effecting such transfer, the company shall send statement to the Authority in Form No. IEPF – 4 containing such transfer.

• Voting rights on the shares transferred to the IEPF shall remain frozen until the rightful owner claims the shares.

• For the purpose of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the shares which have been transferred to the Authority shall not be excluded while calculating the total voting rights.

• The company shall maintain details of shareholding of each individual shareholding whose shares have been credited to the DEMAT account of the Authority.

• All the benefits accruing on such shares i.e. bonus shares, split, consolidation, fraction shares etc except right issue shall also be credited to the DEMAT account.