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Updated: July 14, 2013 16:37 IST

Firms hold Rs. 1,101 crore unclaimed dividend; RIL tops list

PTI
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A flle picture of RIL Chairman Mukhesh Ambani with his wife Nita Ambani at a function in Mumbai. RIL tops the list of unclaimed dividend with Rs. 113 Cr. according to a reply in Lok Sabha.
PTI
A flle picture of RIL Chairman Mukhesh Ambani with his wife Nita Ambani at a function in Mumbai. RIL tops the list of unclaimed dividend with Rs. 113 Cr. according to a reply in Lok Sabha.

Money lying unclaimed in this account for seven years gets transferred to the Investor Education and Protection Fund

With Rs 113 crore, Reliance Industries Ltd (RIL) tops the list of companies that have unpaid and/or unclaimed dividends lying with them, Parliament was informed on Thursday.

Dividend payments of a little over Rs 1,101 crore are lying unclaimed with 1,406 companies, Corporate Affairs Minister Sachin Pilot said in a written reply to Lok Sabha.

Payments are required to be made to investors within 30 days of the dividend being declared. Any unpaid or unclaimed amount needs to be transferred to an ‘unclaimed dividend account’ within the next seven days.

Money lying unclaimed in this account for seven years gets transferred to the Investor Education and Protection Fund (IEPF).

Subsequently, no such claims are entertained against the company or the IEPF for any money transferred to the fund in accordance with the relevant provisions.

“An amount of Rs 1,101.35 crore is presently available with 1,406 companies on account of unpaid and unclaimed dividends,” Mr. Pilot said citing data available with ‘MCA 21’ portal.

Individually, energy giant RIL has total unclaimed/unpaid dividends worth Rs 113 crore, followed by FMCG major ITC (Rs 74.34) crore, Hindustan Unilever (Rs 49.05 crore), Hero MotoCorp (Rs 40.22 crore) and Tata Steel (Rs 38.53 crore).

Besides, other companies having sizable money lying with them in form unclaimed dividends include Lakshmi Vilas Bank (Rs 34.14 crore), ICICI Bank (Rs 19.17 crore), Larsen & Toubro (Rs 18.69 crore), MRPL (Rs 14.23 crore) and IDBI Bank (Rs 13.59 crore)

The companies declare annual dividends at their AGMs (Annual General Meetings) and are required to pay the same to the investors within 30 days thereafter.

Other big companies with uncashed dividends lying with them included HDFC Bank, Hindalco Industries, Tata Motors, Cipla, HDFC, Mahindra & Mahindra, Tata Consultancy Services and Jindal Steel & Power Ltd.

Broadly, companies regularly send reminders to the shareholders concerned, requesting them to claim dividend before it is due for transfer to the IEPF.

The amount transferred to unclaimed dividend account is kept with the company for seven
years, which means the company enjoys the moneys for a period of seven years enjoying
interest free amount. So no company bothers seriously to pay the amounts to the
shareholders and keeps the moneys in their kitty and strictly speaking it is illegal money and
the companies are to be punished. But there is no provision in company law for punishing
the companies. Even RBI cannot punish the banks such as Lakshmi Vilas Bank, ICICI Bank
and HDFC Bank for hoarding such illegal moneys. What kind of corporate governance these
companies are having in place to check this kind of abnormal violation.

from:  P.Ananda Krishna Kumar
Posted on: May 2, 2013 at 23:31 IST

Unclaimed Dividends is just a false pretext and Income disprotiate to
know sources of Assets coming from the balance sheet (window dressing
by CA"s) has led to this amount.

Needs to be audited by CAG of India and make the necessary corrections
and closing loop holes in the system of Accounting process followed by
RIL.

God Help India.

from:  Gopal K Bhagavatula
Posted on: May 2, 2013 at 19:46 IST
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