The Indian government established the IEPFA (Investor Education and Protection Fund Authority) back in September 2016. Think of it as a financial guardian that looks after forgotten money.
This guardian holds a considerable amount of money, around ₹5,685 crore to be precise. But it's not just regular cash; it's made up of company shares and dividends that were left unclaimed.
Surprisingly, many people don't even know this guardian exists. They're unaware that they can reclaim their shares or dividends that have been transferred to the IEPFA by companies for various reasons.
It's like having a hidden bank account with your forgotten cash, but not realizing it's there. The government is eager to spread the word and help people find their lost money. It's like a financial treasure hunt waiting to be discovered. So, if you think you might have unclaimed shares or dividends out there, this guardian might be the key to unlocking them.
Imagine there's a magical jar called the "Investor Education and Protection Fund" (let's call it the Fund for short) created by the government. This jar is like a superhero that helps protect and educate people who invest their money in companies.
Now, what goes into this magical jar?
Credits | Legislation | Explained |
Money from the Government: | The amount given by the Central Government by way of grants after due appropriation made by Parliament by law in this behalf for being utilised for the purposes of the Fund | The government adds some money to the jar. It's like a gift from the government to help with its superhero missions. |
Donations: | Donations given to the Fund by the Central Government, Stat Governments, companies or any other institution for the purposes of the Fund | Other people and organisations can also drop coins and bills into the jar to support the superhero's mission. These could be from the central government, state governments, companies, or anyone else who wants to help. |
Unclaimed Dividends:
| The amount in the Unpaid Dividend Account of companies transferred to the Fund under sub-section (5) of section 124 | Sometimes, companies have money they owe to people, like dividends, but they can't find the people to give it to. After a while, this money goes into the jar. |
Interest and Income: | The interest or other income received out of investments made from the Fund | The jar also makes money by investing the coins and bills inside. So, any money it makes from these investments also goes into the jar. |
Application Money: | The application money received by companies for allotment of any securities and due for refund | When companies collect money from people who want to buy their shares or securities, they need to keep some money aside in case they need to give it back. This money also goes into the jar. |
Matured Deposits and Debentures: |
| Sometimes, when people invest in a company, they get their money back after a certain time. If they forget to claim it, that money goes into the jar too. |
Unclaimed redeemed Preference shares: | Redemption amount of preference shares remaining unpaid or unclaimed for seven or more years and | When Preference shares remain unclaimed on redemption for 7 years, the money goes to this jar. |
But here's the catch - all this money has to stay in the jar for at least seven years without anyone claiming it. Once it's been in there that long, it officially becomes part of the superhero jar.
Now, what does this magic jar do with all this money?
Utilisation | Legislation | Explained |
Refunds: | The refund in respect of unclaimed dividends, matured deposits, matured debentures, the application money due for refund and interest thereon | It helps give back money to people who forgot about their dividends, deposits, or application money. It's like a superhero returning lost treasures. |
Education: | Promotion of investors’ education, awareness and protection | It uses some of the money to teach people about investing and how to protect themselves from tricky situations in the world of money. |
Helping Victims: | Distribution of any disgorged amount among eligible and identifiable applicants for shares or debentures, shareholders, debenture-holders or depositors who have suffered losses due to wrong actions by any person, in accordance with the orders made by the Court which had ordered disgorgement | If someone does something bad and takes money from investors, the superhero jar can help the people who lost their money get some of it back. |
Legal Support: | Reimbursement of legal expenses incurred in pursuing class action suits under sections 37 and 245 by members, debenture-holders or depositors as may be sanctioned by the Tribunal | If there's a big legal fight involving many people who lost money because of a bad company or person, the superhero jar can help pay for the legal costs. |
Anything Else: | Any other purpose incidental thereto, in accordance with such rules as may be prescribed | It can also help with any other important money-related things that the government decides are good for everyone. |
But remember, if you had money in the superhero jar from a long time ago, and you didn't get it back within seven years, you can still ask for it. The superhero jar will give it back to you according to the prescribed rules.
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(Disclaimer: The views expressed in this article are strictly personal opinions of the author and do not necessarily reflect the views or opinions of the company or organisation they may be associated with. This article is intended for informational purposes only . It should not be construed as legal or professional advice and no legal or business decision should be based on its content. Readers are encouraged to seek professional guidance or consult relevant experts for specific legal or professional matters.)
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