You Deserve Your Money back Ban on Physical Share Transfer of Listed Co- Last Date Problem and Solutions

Size: px

Start display at page:

Download "You Deserve Your Money back Ban on Physical Share Transfer of Listed Co- Last Date Problem and Solutions"

Terence McGee
5 years ago
Views:

1 You Deserve Your Money back Ban on Physical Share Transfer of Listed Co- Last Date Problem and Solutions Organised by NIRC of ICAI

2 Wealth Recovery

This happens when one does not share Value of Unclaimed / Physical

43,000 Crores Unclaimed Insurance : Rs 15,166 Crores Unclaimed Bank

3 This happens when one does not share Value of Unclaimed / Physical Investment in the country is more than Rs 6,08,923 Lakhs Crore Stocks / Mutual Fund : Rs. 5,35,000 Crores lying in physical form Unclaimed Provident Fund : Rs 43,000 Crores Unclaimed Insurance : Rs 15,166 Crores Unclaimed Bank Account: Rs 11,302 Crores Unclaimed Corporate Dividends : Rs 3,454 Crores Unclaimed Post Office accounts : Rs 1,001 Crores

4 All hassles for an Investor!!! Does Anyone want their family to roam around from pillar to post to claim the investment? Too many touch point to recover Investments.. Company C.S RTA MCA SEBI NCLT PF office PF trust Banks RBI Legal Advisor Courts Broking Firm Financial Advisor Insurance Co. IRDA Post office CA

5 What we do? We assist in Recovery of Lost / Forgotten or scattered Investment in.. Unclaimed Provident Fund Matured Insurance Unclaimed Mutual Fund Old Shares Bank Deposits Postal Savings Assisting to recover any Investment Fixed Deposit Debtor Recovery

6 Why Investor Need to worry Unclaimed Dividend as well as Shares on which dividend remained unclaimed for more than 7 years gets transfer to IEPF (Investor Education & Protection Fund) after 7 years u/s 125 of Companies Act, 2013 Unclaimed corporate deposit along with interest transfer to IEPF after 7 year Share application money due for refund gets transfer to IEPF Matured deposits or debentures also gets transferred to IEPF If an account is inoperative for more than 10 years, the amount has to be transferred to Depositors Education and Awareness Fund (DEAF) operated by the RBI

7 Shares & Securities Instrument Shares & Securities (Dividend / Interest) Regulator SEBI (Securities & Exchange Board of India) Relevant provision Section 124/125 of Companies Act, 2013 When it is considered to be Unclaimed? When dividend is not encashed within 30 days of declaration To whom it gets transferred? After how may years its gets transferred to Authority? What happens after it transferred to Authority? Whether it can be claimed back by investor? Formalities to claim back Investor Education & Protection Fund 7 years from the date amount becomes unclaimed Refunded to investor, investor awareness etc Yes File form IEPF 5 online and submit it with Indemnity, Adhar Card, Advance Reciept, Letter of Entitlement etc to Nodal Officer of concerned company Appellate Authority SEBI

8 Shares & Securities ISSUE OF DUPLICATE SHARES If original share certificates are lost, apply for duplicate shares KYC documents Indemnity Affidavit Surety ( KYC and Income Proof) Advertisement in Newspaper (If value of shares more than Rs. 10,000/-) Copy of Dividend warrant / Any communication from Company

9 Shares & Securities TRANSFER OF SHARES Transfer of physical shares from Transferor to Transferee Form SH-4 dully filled, signed and executed Pan Card of Transferor mandatory as per Regulation 40(7) and 61(4) of SEBI (Listing Obligation & Disclosure Requirements) Regulation, However SEBI circular dated 06 th November, 2018 has given exemptions if shares are purchased before 01 st December, KYC documents of Transferee Signature verification of Transferor from bank as per format given by RTA (Registrar & Transfer Agent) Stamp Duty to be 0.25% of market value of shares However as per Regulation 40 of SEBI (LODR)(Amendment) Regulation, 2018, Transfer of Physical shares will not be allowed after 31 st March, 2019 (Earlier deadline was 05 th December, 2018)

10 Shares & Securities TRANSMISSION OF SHARES Transmission of share happens when legal heir claims the shares from deceased shareholder KYC documents of Legal heir Indemnity, Affidavit etc If value of shares is more than Rs. 2 Lakhs (in case of physical shares) and Rs. 5 Lakhs(in case of demat shares) Probate of Will or Succession Certificate is required from Court If value of shares is less than Rs. 2 lakhs Surviving Member s Certificate is required from SDM (Sub-Divisional Magistrate) / DM (Divisional Magistrate) office.

11 Shares & Securities Transfer of shares to IEPF(Investor Education & Protection Fund) As per IEPF Authority(Accounting, Audit, Transfer and Refund) Rules, 2016; if dividends are unclaimed for continuous 7 years from the due date of declaration of dividend, dividends are transferred to IEPF As per Section 125 of the Companies Act, 2013 read with IEPF Rules, 2016, if dividend remained unclaimed for continuous 7 years, shares pertaining to those dividend are also transferred to IEPF. To claim the shares / dividends from IEPF, Investors need to file Form IEPF 5 and submit requisite documents to the Nodal Office of the company. Nodal Officer of the company need to issue Verification Report to IEPF, on the basis of which, IEPF Authority approves / rejects the claim

12 Shares & Securities Recent Amendments & Developments UNLISTED PUBLIC COMPANIES:- As per newly inserted Rule 9(A) of Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2018, dematerialization of shares of Unlisted Public Companies has been made mandatory w.e.f. October 02 nd, Every Unlisted Public Company shall ensure that before issue / buyback of any security or issue of bonus or right shares, entire holding of securities of its promoters, directors, KMP has been dematerialized Even Unlisted companies are required to make fresh issue or allotment in dematerialized form only Listed Companies:- No transfer of Physical shares of Listed Companies shall happen after 31 st March, 2019 as per SEBI(LODR)(Amendment) Regulations, 2018 Transfer of shares of Listed Companies can take place without PAN card in case of NRIs being Transferors (Sellers) contd.

13 Shares & Securities Recent Amendments & Developments SEBI Circular dated 06 th November, 2018 for Transfer of Shares:- Shares can be transferred even if Transfer Deeds are executed prior to notification of LODR (01 st December, 2015), without PAN of Transferor Shares can be transferred even in case of Mismatch of Name of transferor on PAN and Share Certificate Shares can be transferred even in case of Non availability / Mismatch of Signatures of Transferor RTAs shall try to connect with transferor bases on his last known address and dividend history In case Transferor is not approachable or is not co-operating, RTAs need to make a public announcement in this regard with a waiting period of 30 days If there is no objection even after 30 days of public advertisement, Shares can be transferred by RTAs by asking for Indemnity Bond and Address proof of Transferee and also an Undertaking that Transferee shall not sell / demat shares within 6 months of transfer of shares in his favor.

14 Unlisted Public Co Share in DEAMAT only MCA NOTIFICATION DATED 10 SEPT 2018 Every unlisted public company shall (a) issue the securities only in dematerialised form; and (b) facilitate dematerialisation of all its existing securities in accordance with provisions of the Depositories Act, 1996 and regulations made there under.

15 Physical Shares transfer last date Transfer of securities only in demat form- Deadline extended till April 1, Dec 03, SEBI- PR No.: 51/2018 The Board, on March 28, 2018, decided that except in case of transmission or transposition of securities, requests for effecting transfer of securities shall not be processed unless the securities are held in the dematerialized form with a depository. This measure was to come into effect from December 5, Subsequently, SEBI has received representations from shareholders for extension of the date of compliance. In view of the same, the deadline has been extended and the aforesaid requirement of transfer of securities only in demat form shall now come into force from April 1, 2019.

16 NO PAN FOR NRI-Feb 2019 Markets regulator Sebi Monday granted relaxation to non-residents such as NRI, PIOs, and foreign nationals from furnishing a copy of PAN card and allowed them to transfer equity shares held by them to their immediate relatives. However, the relaxations are subject to certain conditions, Sebi said in a circular. Under Sebi's LODR (Listing Obligation and Disclosure Requirements) provisions, transferee as well as transferor is required to furnish a copy of their PAN (Per.. Many of the non-residents like Overseas Citizens of India (OCIs), Non Resident Indians (NRIs), Persons of Indian Origin (PIOs) and foreign nationals were facing difficulties in transferring the shares, as many of them do not posses the required PAN card. To address such difficulties, it has been decided to grant relaxation to the non-residents from furnishing PAN card details and allowing them to transfer equity shares held by them in the listed entities to their immediate relatives, Sebi said. However, the relaxation will only be available for transfers executed after January 1st, 2016 and, only for noncommercial transactions i.e transfer by way of gift among immediate relatives.

17 Shares & Securities ASTONISHING FACTS RS of Wipro Rs 10,000 of CIPLA Rs 10,000 of Infosys Today s worth is more than 750 cr Today s worth is more than 100 cr Today s worth is more than Rs 150 cr 17

18 Debtor Recovery Some Facts Recovery from Debtor is done through Insolvency & Bankruptcy Code, 2016 It is a time bound resolution for recovery of Bad Debt (within 6-9 months) Recovery can be made for Debts arising for last 3 years IBC (Insolvency & Bankruptcy Code) empowers all classes of creditors (secured and unsecured lenders, employees, trade creditors, regulatory authorities) Provides for immediate suspension of the BOD and powers. promoters

19 Debtor Recovery Insolvency Resolution The process may be initiated by either the debtor or the creditors. National Company Law Tribunal (NCLT) would deal with matters relating to corporate insolvency Who are Financial and Operational creditors? Financial debt: means debt extended against consideration for the time value of money, and includes the following example: Term Loans, Working capital loans etc., Receivables etc; Operational debt: means debt incurred in exchange for the provision of goods or services (including employment) or debt in respect of the payment of statutory dues; Creditors include secured, unsecured creditors including foreign creditors and decree holders from the court

20 Wealth Protection

21 We are earning for whom?? o Most of us work hard to create financial assets. o We spend a lot of time planning our finances, pondering over that expensive house we plan to buy and creating wealth through stocks and gold. o For all of us, the sole motive of such measures is leave a rich financial legacy for children / family. o Therefore, it's important that the wealth is transferred in the right hands in case of any contingencies

22 Some example of Unclaimed Investment Unclaimed Provident Fund Unclaimed Matured Insurance Inoperative Bank Accounts Physical Shares Pending Transfer of shares Pending Transmission of shares Unclaimed Dividends Unclaimed Bonuses, Split Shares Corporate Deposit

23 Reason of Unclaimed Investment Share Samadhan 23

24 Life is Uncertain Old Age Ailments Natural calamities Disability Untoward Incidents Job/Income Changes Variety of Investments

25 Should not compromise Buy Term Policy from Life Insurance Companies. Suggestive to take term policy equivalent to approx 12 time of the income of the earning member. Road accident death compensation from MACT (Motor Accident & Claim Tribunal) Never delay in the renewal of General Insurance

26 Some lesser known facts In case of sudden demise, the person whose PF was getting deducted then there is EDLI (Employee Deposit and Linked Insurance) insurance is also there upto Rs. 600,000/- claims can be made. A wrong perception : PF can not be claimed in case employer shut down the operation. Now accidental cover though booking of tickets through IRCTC is up to Rs 10 Lakhs

$fraction Of seconds$ Road Accident In

27 Just imagine these Situation 30,000 death in Gujrat Earthquake in fraction Of seconds 400 daily death in Road Accident In India 3000 in world Around 100 daily rail accident Death in India in 2014 One Sudden Cardiac Arrest in every 33 Second Documents may be gutted in fire Theft / Document misplace Floods

28 Is Your Family member aware about your Investments?

29 What to do then.. Family Need to Know Nominee Preserving the information is structured manner

31 Else Rest this with digital wallet companies How about someone there who is like a Trusteeship of your Investment

32 Preventive measures Keep photocopy of all the investments at Home. Password saving Family should be aware

33 How safe is subscriber Info We do not ask any document Up to 256 SSL Secured and encrypted No info sharing till subscriber alive Family verification will be done before sharing It is just as Gmail of your Investment

34 Media Coverage Zee Business_ Economic Times _ Purvodaya_ Focus News_ Economic Times Wealth _ Pratidin_

Share Samadhan Journey started in 2011 Abhay Chandalia Abhay is a Chartered Accountant,

corporate association with prominent groups like K K Birla, L N Mittal.

Whiteinc group after his illustrious service in CEAT Tyres (RPG group), KPOmajor

35 Share Samadhan Journey started in 2011 Abhay Chandalia Abhay is a Chartered Accountant, Company Secretary and LLB who co-founded the Whiteinc group after long 15 years of corporate association with prominent groups like K K Birla, L N Mittal. Vikash Jain Vikash is a qualified Chartered Accountant and Company Secretary co-founded Whiteinc group after his illustrious service in CEAT Tyres (RPG group), KPOmajor Evalueserve and Carnation, owned by former MD of Maruti, Jagdish Khattar. 20 employee team 12 CA/CS/MBA 8 Graduates /support staff

36 We would be glad to hear from you. CA Abhay Chandalia FCA, FCS, LLB, MCOM, MBA M Regd office B 35, Lower Ground Floor, South Ex Part II, New Delhi (India) M: P: (60 lines) ww.sharesamadhan.com 36

DEMATERIALISATION / REMATERIALISATION OF SHARES

FAQs DEMATERIALISATION / REMATERIALISATION OF SHARES DIVIDEND NOMINATION FACILITY TRANSFER /TRANSMISSION/TRANSPOSITION ETC. OF SHARES. LOSS OF SHARE CERTIFICATES MISCELLANEOUS DEMATERIALISATION / REMATERIALISATION