MCA gets notice over dividend transfer

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SummaryThe Supreme Court on Monday issued a notice to the ministry of corporate affairs and others on a petition challenging provisions of the amended Companies Act, 1956, that deal with transfer of unpaid/unclaimed dividend account of a company to the Investor Education and Protection Fund.

The Supreme Court on Monday issued a notice to the ministry of corporate affairs (MCA) and others on a petition challenging provisions of the amended Companies Act, 1956, that deal with transfer of unpaid/unclaimed dividend account of a company to the Investor Education and Protection Fund (IEPF).

A bench headed by Justice HL Gokhale issued a notice to the Centre and the Industrial Credit and Investment Corporation of India (ICICI) on a petition filed by Nivedita Sharma, a lawyer, seeking a direction to MCA to give complete details of unclaimed money transferred to the Consolidated Fund of India (CFI) on account of the IEPF.

Besides, she has also sought a direction to the Centre to take steps to transfer the entire amount collected under the IPEF fund and transferred to CFI to a separate account and refund the same to the claimants.

Sharma has also sought release of her money with interest as per the original agreement or at the lending rate charged by RBI. ICICI had allocated five unsecured redeemable bonds (Ashirwad Deep Discount Bonds) to Sharma. Though the validity period of bonds was of 25 years, within five years of issuance of these bonds, ICICI issued public notice in 2001 exercising its earlier redemption option. The petitioner could not come to know of this option of earlier redemption exercised by the ICICI, thus she failed to claim the amount.

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