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Corporate affairs ministry may receive 24K claims for unclaimed dividends, shares & deposits from cos. & investors by end of this year: Official

 

Wednesday, June 26, 2019


Ministry issuing notice to cos. & NBFCs to transfer unclaimed amount
 
New Delhi, 26 June 2019: The Ministry of Corporate Affairs’ Investor Education and Protection Fund (IEPF) Authority is reaching out to companies and investors in large numbers who have unclaimed dividends, shares and deposits and expects to receive about 24,000 claims by end of this year, a top official said at an ASSOCHAM event held in New Delhi today.
 
“In the last to last year we had received something about 2,000 claims in the entire year but today we are receiving 2,000 a month, so we will be ending this year by about 24,000 claims, that is a huge increase,” said Mr Rajiv Bansal, AS&FA, Ministry of Corporate Affairs and CEO, IEPFA in his inaugural address at an ‘ASSOCHAM National Summit on Investors Protection, Education and Awareness.’
 
Mr Bansal informed that parallelly, the Corporate Affairs Ministry is also in the process of issuing notice to companies both listed, non-listed and non-banking financial companies (NBFCs) to transfer unclaimed amount.
 
“Even all the listed companies that we have, have not transferred unclaimed shares to us, quite a good number have, so we are in the process of issuing notice to the listed company, non-listed company, NBFCs to transfer these unclaimed amounts to us,” he said.
 
“At the same time we are trying to create awareness among the citizens to file their claims to recover their amount,” added Mr Bansal.
 
Talking about the focus of Corporate Affairs Ministry on KYC (know your customer) norms for directors and companies, he said that there have been very large number of shell, fictitious, non-existent companies and multiple companies with same address, thus a huge weeding out process is underway in the entire corporate sector.
 
Talking about the work being done by Corporate Affairs Ministry along with Indian Institute of Corporate Affairs (IICA) to create investor awareness programs, Mr Bansal said, “We already have these radio jingles available, we are trying to create a 10-episode serial which would be aired on TV which would focus by way of a serial and indirect messaging on the challenges and ills of ponzi schemes.”
 
He added, “We are working on that and we hope that during the course of the year both our TV serial and ad campaign will come out.”
 
Mr Bansal also said that as India’s economy continues to grow and moves from a $2 trillion to $5 trillion economy and we have government interventions which target the economically marginalised and people living in the rural areas, we will have an increase in the household savings rate, thus it is very important for those involved in this sector to roll out ways and means to create more investor awareness, education and trust.
 
“Once our household disposable incomes grow, our savings rate grows, there will be more money growing into investments, that is why, I feel it is very important at this stage to create awareness amongst the investors and focus on this very important aspect of investor awareness and investor education, because the most important thing in the investment business is the investors’ trust and once trust is broken it takes quite long for investor to come back and invest,” he said further.
 
He also said that since there are different types of investors, there is a need to focus differently on different clients. For any company as a market segmentation strategy, the investor community also needs to be addressed and targeted differently.
 
In his address at the ASSOCHAM conference, Mr Nagendra Parakh, executive director, Securities and Exchange Board of India (SEBI) said that the capital markets regulator works for investor protection and its entire focus is on the same.
 
“In its latest circular released on June 13, SEBI had prescribed disclosure requirements for rating agencies and also came up with a yardstick that if a rating agency gives AAA rating and if that company defaults within three years then that would be questionable so there is now a rating scale and so enquiry would be conducted, if the company falters then action would be initiated,” he said.
 
Addressing the ASSOCHAM conference, Mr Ashok Wadhwa, chairman, ASSOCHAM National Council on Capital Market & Investors Protection said, “To promote increasing investor protection and to help restore trust in financial markets, all stakeholders need to embrace the changes and help create a larger pool of informed investors.”
 
Mr Wadhwa also suggested certain key aspects that will go a long way in improving investor confidence and seeking greater investor participation – ethical selling practices and enhanced disclosure by financial product distributors in a simplified manner, simpler processes to make, monitor & exit investments in financial products, and clear communication regarding potential risks of financial instruments, in a timely manner.
 
In his address, Mr Narinder Wadhwa, co-chairman, ASSOCHAM National Council on Capital Market and Investors Protection said that SEBI has done a commendable job in developing the framework for Indian capital market over the years.
 
“Several steps have been taken by regulators to enhance level of corporate governance, disclosures, and important legislation are in place to curb market malpractices, however, there is lot to be done in view of the increased level of sophistication in market and complex instruments like derivatives and other structural products,” said Mr Wadhwa who’s also the president of Commodities Participants Association of India (Cpai).
 
 
About ASSOCHAM:

ASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. It was established by promoter Chambers, representing all regions of India. Having in its fold over 400 Chambers and Trade Associations, and serving over 4.5 lakh members across India. ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is all set to redefine the dynamics of growth and development in the Knowledge Based Economy. More information available on www.assocham.org
 
For further details, please contact:
 
Manju Negi
AVDHESH SHARMA    
ASSOCHAM
ASSOCHAM    
011-46550509; +919810910911
011-46550508; +918527639419
 

 

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