Corporate affairs ministry to ease guidelines for unclaimed dividends

The corporate affairs ministry is working on easing procedures to help those re-claiming dividends, lying unpaid for more than seven years. If dividends declared by companies are unclaimed for seven years, they are transferred to government accounts.

Till 2009-10, over Rs 800 crore is lying as unclaimed and unpaid dividends with the government accounts.

The ministry will also come out with fresh guidelines to manage these unpaid and unclaimed dividends that are transferred to the government accounts.

The ministry is working on a system where the names of such investors who have not claimed their dividends will be displayed on its website soon.
 

DIVIDEND DOSSIER

* The dividends, lying unpaid for more than seven years, are transferred to government accounts

* Till 2009-10, over Rs 800 crore is lying as unclaimed and unpaid dividends with the government accounts 

* The ministry will also come out with fresh guidelines to manage these unpaid and unclaimed dividends 

* The ministry is working on a system where names of investors who have not claimed dividends will be displayed on its website

* Under the current law, if dividends are not been paid or claimed within 30 days, companies transfer the amount into a new account called the Unpaid Dividend Account

Under the current law, if dividends declared by the companies are not been paid or claimed within 30 days, companies transfer the total amount into a new bank account called the Unpaid Dividend Account.

The investors can claim that amount from this account anytime during the next seven years.

If it remains unclaimed for seven years, it gets transferred to the government account, primarily to the Investor Education and Protection Fund (IEPF), a fund which is managed by the ministry.

IEPF also gets its corpus from other sources including grants and donations given by the central and state governments, companies and other institutions.

While the current law requires the investor to approach the ministry to claim such unpaid or unclaimed dividends from the government exchequer, the proposed Companies Bill 2011, calls for the setting up of an authority to manage IEPF and also settle the claims for these unpaid dividends.