Economy analysts and legal practitioners have stood against the Buhari led government’s plans to manage the unclaimed dividend standing at about N200 billion.
Due to the question of trust, the analysts posit that if government is allowed to manage the funds, it will likely erode investor confidence which will even lead to some quoted companies de-listing from the capital market.
Owing to shortage of revenue, especially from oil to fund economic development, Buhari-led government recently sent a bill to National Assembly proposing that the unclaimed dividends be managed on behalf of shareholders through Unclaimed Dividend Trust Fund.
But in his view on the legality of the proposal while speaking on Channels Morning programme recently, the President of Institute of Chartered Secretaries and Administrators of Nigeria, ICSAN, Bode Ayeku described the proposal as very strange believing that if the proposal sails through, a lot of listed companies will delist as there will be loss of confidence.
The proposal “is an infringement on the rights of shareholders” as stipulated by principle 23 of the Nigerian Code of Corporate Governance 2018, which underlines the protection of the right of the shareholders.
Read Also: Autochek raises $3.4M pre-seed fund from investors
According to him, why shareholders buy shares is to earn dividend, and if a third party is trying to expropriate what belongs to shareholders, it is contrary to the right of the shareholders, Ayeku said. The move is also contrary to the provisions of the Nigerian Constitution which gives every Nigerian the right to property. “When government attempts to expropriate what belongs to an individual it is contrary to the right of every Nigerian which is guaranteed in the Constitution”.
What makes the intention of government of planned expropriation of the unclaimed dividend unfair, is that government had already collected 30% as corporate tax, 2% as education tax and 10% withholding tax which brings it to a total of 42%.
“Now government is saying that it wants to be interested in the remaining 58%. Then the question is whether government has any investment in these shares”. Ayeku maintained that government should rather be interested on how to address the unclaimed dividend issue.
Also speaking on the programme, another legal practitioner, Jiti Ogunye agreed that Nigeria presently is going through rough times and that puts pressure on government to manage the economy which results to various mean including borrowings but said if dividends are unclaimed, government should be extremely interested on how the dividends will be claimed.
Ogunye said there are many reasons dividends are unclaimed such as share value depreciation, reason of death, lack of identification shareholders but said government should be interested in ensuring justice that the shareholders or their relatives get their dividends.
The lawyer believed that when government manages the fund under the Unclaimed Dividend Trust Fund, there will likely be bureaucratic stone wall and bottlenecks when the shareholders wake up to claim their money even as little as N5,000 or N10,000.
On how to resolve the unclaimed dividends, Ogunye suggested for reforms to ease the issue of succession of properties. It is the responsibility of law makers to revisit archaic laws that are causing pains such as laws on unclaimed dividends and make them implementable.
He also both the companies from which the shares were purchased and the capital market operators need to come together, synergise and assist in resolving the issues of unclaimed dividend.
The analysts said the process of accessing the unclaimed dividends should be simplified to allow ease of payment of the dividends. According to him a single form where a shareholder can list all his/her shares in other companies is enough to allow a shareholder access other registrars for payment within a time frame. They agreed that there should be provision for default beneficiaries at the time of purchase of the shares.
