 "Adani-Hindenburg: SC panel urges centralised database of unclaimed property")
The Investor Education and Protection Fund Authority (IEPFA) has told the expert committee formed by the Supreme Court in the Adani-Hindenburg matter, that it has been unable to handle the volume of calls, emails for refund claims due to a ‘very rudimentary redressal mechanism.’ The Authority also flagged technical issues such as non-interoperability of different technical platforms, rent seeking behaviour of unscrupulous agents which have come in its way.
“It is a classic example of capacity constraints of the State being visited upon a public facing service as a result of which the size of the assets lying with the IEPFA is evidently large,” the committee’s report said.
The expert committee has therefore suggested setting up a centralised searchable database of unclaimed property and money of the general public that gets transferred to government owned repositories such as IEPF. The core objective of this database would be to reunite unclaimed property, including all financial assets with the rightful owner. It would also enable proven legal heirs to get a full picture of the investments and savings of the deceased and claim their money.
The panel also said that in order to be effective, a statutory central authority, backed by appropriate legislation, must be empowered to track the rightful owners, resolve grievances and deal with security and privacy concerns.
Need of the hour
- Objective of database is to reunite unclaimed property with the rightful owner
- To be effective, a central authority, backed by legislation, must be empowered
- Flow of data not seamless, refund takes more than stipulated time
- IEPFA should create standard operating procedures, introduce PAN-based KYC for nominees
The IEPFA in a submission to the committee also said that since there are multiple stakeholders involved in the process working on different electronic platforms, there are issues of interoperability. It also said that The flow of data is not seamless and the process of refund takes way more than the statutory stipulated period.
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The IEPFA has been established under section 125 of the Companies act 2013, with the objective of promoting investor, education, awareness and protection. Investors can claim refund by filing an online application notification, which then undergoes a process of reverification.
“The committee learnt that the uncleaned shares held under his head is to the order of Rs 47,000 crore and cash to the extent of nearly Rs 5,200 crore,” the report said.
“It is only when the databases are interoperable and integrated that the system would be effective. This will involve legal mandate and organisational structure with holistic IT based automated processes,” it said.
The committee asked the IEPFA to create standard operating procedures, introduce PAN based KYC for nominees for simplifying the process of identification and transfer of assets.