Unclaimed Dividend and Transfer to the Investor Education and Protection Fund

8. Unclaimed Dividend and Transfer to the Investor Education and Protection Fund

Unpaid Dividend Account [Section 124, Companies Act, 2013]: if a dividend declared by a company remains unpaid or unclaimed even after the 30-day payment period expires, the company must, within 7 days of the expiry of that 30-day period, transfer the unclaimed amount to a special bank account called the Unpaid Dividend Account. The company must also, within 90 days of making this transfer, upload on its own website (and on the Ministry of Corporate Affairs website) the names and last known addresses of the members whose dividend remains unpaid.

Transfer to the IEPF [Section 124(5) and (6)]: any amount that remains unclaimed in the Unpaid Dividend Account for a further period of 7 consecutive years from the date it was transferred there must then be transferred, along with interest, to the Investor Education and Protection Fund (IEPF) established by the Central Government. Even more significantly, Section 124(6) requires that the shares themselves, in respect of which dividend has remained unclaimed for 7 consecutive years, must also be transferred to the IEPF (credited to the IEPF's own demat account) — though a member can later claim back both the shares and the dividend from the IEPF Authority, with the prescribed procedure and interest, by making a specific application.

The Secretary's intimation letter before transfer: before the shares are actually transferred to the IEPF, the company is required to individually intimate the concerned member, by letter, of the impending transfer, giving the member a real opportunity to claim the unpaid dividend before that 7-year period expires and the transfer becomes obligatory. This letter, and the public notice the company must also publish, is a genuine investor-protection safeguard, not a mere formality.

Specimen intimation letter regarding unclaimed dividend:

SAHYADRI TEXTILES LIMITED
Regd. Office: 88, Shivaji Nagar, Kolhapur - 416 003
CIN: L17110MH2010PLC201456

Ref. No. STL/CS/2025-26/501                                    Date: 5th January, 2026

To,
Mr. Ravi D. More
Folio No. STL-04012
16, Mangalwar Peth,
Sangli - 416 416

Dear Sir,

Sub: Intimation Regarding Unclaimed Dividend — Transfer to the Investor Education and Protection Fund (IEPF)

We wish to inform you that the dividend of Rs. 850 declared by the Company for the financial year 2018-19, credited to the Unpaid Dividend Account of the Company, remains unclaimed by you to date. …