GS 2: Governance

Why in News?

In a major success, the IEPF Authority has been able to enforce The Peerless General Finance and Investment Company Limited to transfer deposits worth about Rs 1514 Cr to IEPF.

Highlights:

• This depositor’s money was pending with The Peerless General Finance and Investment Company Limited for the last 15 years.
• This amount was taken by the company by issuing about 1.49 Cr Deposit Certificates and include more than 1 Cr individual investors.
• The data submitted by the company reveals that 50.77 percent of the total amount was taken in the form of deposit certificates of the value of Rs. 2000 or less. Number wise such certificates form 85.32 percent of the total number of certificates issued.
• The majority of these investors are common citizens belonging to the lower and middle-income group including daily wage earners, etc.
• Geographically, the investors involved belong to 30 states and Union territories of the Country. Majority of the investors belong to the state of West Bengal.
• The Authority has also acted against companies that have transferred the unpaid dividend amount to IEPF but have failed to transfer shares in accordance with section 124(6) of the Act.
• In some other cases, the companies are showing unclaimed and unpaid amounts in their Balance Sheets but have not transferred such amounts to IEPF even after seven years. Based on the above, the authority has issued more than 4000 notices to the companies under section 206(4) of the Act for calling information.

IEPF Authority:

• IEPF Authority has been set up under the Ministry of Corporate Affairs, Government of India as a statutory body under Companies Act 2013 to administer the Investor Education and Protection Fund with the objective of promoting Investor’s Education, Awareness and Protection.
• The Authority takes various initiatives to fulfil its objectives through Investor Awareness Programmes and various other mediums like Print, Electronic, Social Media, and Community Radio etc.
• The size of IEPF Fund has almost doubled within one year with an accumulated corpus of about Rs 4138 Cr. The companies have also transferred about 65.02 Cr valuing Rs 21,232.15 Cr.
• Secretary Ministry of Corporate Affairs is the Chairperson of the Authority. Joint Secretary Ministry of Corporate Affairs is the Chief Executive Officer of the Authority.