Illustration: Ajay Mohanty
A Business Standard
analysis of the shareholding
records of the S&P BSE 100 firms
shows that shares
worth at least Rs 13.02 billion are lying unclaimed with companies.
are unclaimed because of various reasons, including heirs not being aware of their inheritance and misplacement or loss of share certificates.
Tobacco major ITC
accounts for the biggest chunk of such shares
by value. It held 13.71 million unclaimed shares
worth Rs 3.6 billion, the data as of end-December, analysed by Business Standard
, shows. Gems and jewellery leader Titan Company
held 1.71 million shares
worth Rs 1.6 billion. Mining company Vedanta’s unclaimed shares
number 3.4 million, worth about Rs 957 million.
The numbers of shareholders
involved are 7,083 in the case of ITC, 1,502 in the case of Titan, and 3,980 in Vedanta.
Based on latest shareholding
as of December-end. Value is based on share price as on April 9, 2018; Sources: BSE, Business Standard analysis
Ankit Singhi, partner, Corporate Professionals, an advisory firm, said the transfer provisions came with the Companies Act of 2013. Companies were earlier required to transfer dividends unclaimed for seven years to the IEPF. This provision was made applicable to transfers of shares
too, and came into effect when a revised provision was notified in 2016.
Even if there are pending dividends, investors can avoid a transfer if they have claimed dividends at least once over a seven-year period, according to Singhi.
are not transferred if a dividend is claimed in any of the preceding seven years,” Singhi said.
At least some transfers have happened. Zee Entertainment Enterprises
included the following note as part of its records. “During the quarter ended December 31, 2017, 111,070 unclaimed equity shares
held by 2,124 shareholders
were transferred to the beneficiary account of the IEPF authority, according to Section 124(6) of Companies Act, 2013. These included 45,629 undelivered shares
held by 116 shareholders
reported under Regulation 39 of Securities and Exchange Board of India
(Sebi) listing regulations,” it said.
The move to mandate this came after fraudulent transfers in such shares
came to light.
Sebi had debarred registrar and share transfer agent Sharepro Services (I) from the market in its order of March 22, 2016. The order noted that unclaimed dividends and shares
of people, including a deceased shareholder, were fraudulently usurped.
Hinesh Doshi of the Investors’ Grievances Forum said the transfer should not pose a problem so long as the government acted as custodian and no attempt was made to sell the shares.
Currently, they can be reclaimed by filing a refund claim form with the IEPF.