New Delhi, Oct 06: The Department of Company Affairs is planning to take penal action against companies that are not complying with rules on transfer of unclaimed dividends and deposits to the Investor Education and Protection Fund. "The department, in coordination with the Reserve Bank and Indian Bankers Association, is planning to conduct a survey of such defaulting companies," official sources said.
Following the survey, DCA plans to take strict penal action against defaulting companies which fail to adhere to the stipulated norms, they said.

According to DCA norms all dividends or deposits remaining unpaid for a period of seven years in 'Unpaid Dividend Account' of a company on or after October 1995, should be transferred to the investor protection fund.
Although many companies have started transferring the unclaimed dividends to the fund, DCA has observed several cases where companies are trying to avoid such transfers by interpreting the rules differently.

The IEPF was set up in October 1998 in accordance to Section 205C of the Companies Act as part of efforts to safeguard investors' interest. Bureau Report Bureau Report