New Delhi, Sep 11 (UNI) In order to increase transparency, investors’ protection and governance in corporate sector, the Corporate Affairs Ministry has directed unlisted public companies to issue or transfer shares in demat or electronic form only.



This decision would come into effect from October 2, this year, the Ministry said here on Tuesday.





The Ministry added that rules in this regard have also been amended accordingly.





According to the Ministry, with this decision, elimination of risks associated with physical certificates such as loss, theft, mutilation, fraud would be less and corporate governance system would improve by increasing transparency and preventing malpractices such as benami shareholding and back dated issuance of shares.



The benefits of dematerialisation of securities also included exemption from payment of stamp duty on transfer and ease in transfer and pledge of securities.



'Unlisted Public Companies are expected to facilitate the dematerialisation of their securities in coordination with depositories and share transfer agents. Any grievances arising out of such dematerialisation of securities will be handled by the IEPF Authority,' it added.

The decision comes at a time when the Ministry is clamping down on shell companies that are suspected of being conduits for illicit fund flows.



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