Amounts To Be Credited To Fund
Following amounts shall be credited to the Fund-
- The amount given by the CG by way of grants.
- Donations given to the Fund by the CG, the State Governments, companies or any other institutions.
- The amount of unpaid dividend of the companies transferred to the Fund as per section 125(5).
- The amount in the general revenue account of the CG which had been transferred to that account under section 205A(5) of the Companies Act, 1956, as it stood immediately before the commencement of the Companies (Amendment) Act, 1999 and remaining unpaid or unclaimed on the commencement of the Act.
- The amount lying in the Investor Education and Protection fund under section 205C of the companies act, 1956.
- The interest and other income received out of investments made from the Fund.
- The amount received under section 38(4).
- The application money received by companies for allotment of any securities and due for refund.(If remained unpaid and unclaimed for a period of 7 years from the date it became due for payment)
- Matured deposits with companies other than banking companies. .(If remained unpaid and unclaimed for a period of 7 years from the date it became due for payment)
- Matured debentures with companies. .(If remained unpaid and unclaimed for a period of 7 years from the date it became due for payment)
- Interest accrued on the amounts referred to in clauses (h) to (j).
- Sale proceeds of fractional shares arising out of issuance of bonus shares, merger and amalgamation for seven or more years.
- Redemption amount of preference shares remaining unpaid or unclaimed for seven or more years; and such other amounts as may be prescribed.
Utilization of Fund
Fund shall be utilized for the following-
- Refund in respect of unclaimed dividends, matured deposits, matured debentures, the application money due for refund and interest thereon.
- Promotion of investor`s education, awareness and protection.
- Distribution of any disgorged amount among eligible and identifiable applicants for shares or debentures, shareholders, debenture-holders or depositors who have suffered due to wrong actions by any person, in accordance with the orders made by the Court which had ordered disgorgement.
- Reimbursement of legal expenses incurred in pursuing class action suits under section 37 and 245 by members, debentures-holders or depositors as may be sanctioned by the Tribunal; and
- Any other purpose incidental thereto.
Explanation: The disgorged amount refers to the amount received through disgorgement or disposal of securities.
Powers of Central Government
- Any person claiming to be entitled to the amount may apply to the authority constituted for the payment of the money claimed.
- The CG shall constitute an authority for administration of the Fund.
- The manner of administration of the fund, appointment of chairperson, members and chief executive officer, holding of meetings of the authority shall be in accordance with such rules as may be prescribed by CG.
- The CG may provide to the authority such offices, officers, employees and other resources in accordance with rules as may be prescribed.
- The authority shall administer the fund and maintain separate account and other relevant records in relation to the fund in such form as may be prescribed after consultation with the Comptroller and Auditor-General of India.
- It shall be competent for the authority constituted to spend money out of the fund for carrying out the objects specified.
- The accounts of the fund shall be audited by the Comptroller and Auditor General of India at such intervals as may be specified by him and such audited accounts together with the audit report thereon shall be forwarded annually by the authority to the CG.
- The authority shall prepare for each financial year its annual report giving a full account of its activities during the financial year and forward a copy thereof to the CG and the CG shall cause the annual report and the audit report given by the Comptroller and Auditor General of India to be laid before each House of Parliament.