MCA requires Cos. to file form IEPF-7 within 30 days of remittance of funds to bank a/c of IEPF Authority

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MCA requires Cos. to file form IEPF-7; IEPF Authority

Notification no. G.S.R. 888(E), Dated: 28.12.2021

Ministry of Corporate Affairs (MCA) has notified the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer, and Refund), Third Amendment, Rules, 2021 (IEPF Rules). As per the amendment rules, companies remitting any amount to the Fund are required to furnish details thereof to the Authority in Form No. IEPF-7 within thirty days from the date of remittance or within thirty days from the date of commencement of the IEPF (Accounting, Audit, Transfer, and Refund), Third Amendment, Rules, 2021.

In respect of the manner of transfer of shares u/s 24(6) to IEPF, the amended norms provide that the shares held in such DEMAT account shall not be transferred or dealt with in any manner whatsoever except for the purposes of transferring the shares back to the claimant as and when he approaches the Authority or in accordance with sub-rules (10), (11) and (11A).

A new sub-rule (11A) has been inserted to rule 6 which provides that in case of an application is received for the purchase of minority shareholding, the Authority may receive the amount entitled on behalf of the minority shareholders from the company as per procedures provided Section 236(5) and credit the amount to the Fund and a separate ledger account shall be maintained for such proceeds. However, the Authority before such receipt of money on behalf of such shareholders shall verify that the conditions provided under the relevant section of the Act and rules framed thereunder have been satisfied and shall also call a report from the company on:

    1. whether the acquirer to whom the shares held by the Authority would be transferred has fulfilled the requirements of section 236;
    2. whether the shares have been valued in accordance with the provisions of sub-section (2) of section 236 and the rules made thereunder; and
    3. any other relevant information.

It further provides that he company shall be liable under all circumstances whatsoever to indemnify the Authority in case of any dispute or lawsuit that may be initiated and the Authority shall not be liable to indemnify the minority shareholder or the Company or any other person for any liability arising, leading to any litigation or complaint arising thereof.

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