Financial experts on Friday expressed mixed feelings to the Securities and Exchange Commission (SEC) directive to Registrars of Public Companies to return unclaimed dividends for 15 months and above in their custody.
Speaking in separate interviews in Lagos, the said that the commission should first seek amendment of the Companies and Allied Matters Act (CAMA) before issuing the directive.
Mr Bayo Adeleke, National Secretary, Independent Shareholders Association of Nigeria (ISAN), said that the commission was extending an “unauthorised overdraft to companies”.
Adeleke said that quoted companies would use the money in their operations, noting that it would be difficult for shareholders to access such dividends.
“The law is clear on the issue; it takes 12 years for dividend to be statute barred and revert to the company.
“Registrars are major link with shareholders on dividend issue,” he said.
Adeleke said that the directive should be reversed because where a rule negated a law, the rule could not stay.
Mr Boniface Okezie, National President, Progressive Shareholders Association of Nigeria (PSAN), said that the commission’s directive must be applied with caution.
Okezie said that the commission should initiate a bill at the National Assembly to seek review of 12 years statute-barred placed on unclaimed dividends in the market in Section 383 of CAMA.
He said that statue bar placed on unclaimed dividend should be repealed before such dividends could be reverted to the companies.
Okezie said that SEC was relying only on Section 372 which stated that dividend declared by companies after 15 months might be called back by the company, if shareholders concerned failed to claim the money within that period.
The shareholder activist called on shareholders to claim their dividends once declared and use the electronic dividend platform to curb the high profile of unclaimed dividends in the market.
Mazi Unegbu, a former President, the Chartered Institute of Banker of Nigeria (CIBN), commended the commission’s directive on unclaimed dividends.
Unegbu said that registrars had been using the funds to grow their businesses over the years without any interest to the affected shareholders.
He said that companies should use the money to buy additional shares for the owners of the unclaimed dividends.
Unegbu said that the funds should be given to charity organisations when companies found it difficult to trace the owners’ family.
He said that statue bar on unclaimed dividends should be reduced to four years against the initial 12 years to lessen the burden.
Unegbu, however, said that the commission must work with the Central Bank of Nigeria, commercial banks and stockbroking firms to curb the menace.
He said that investors should be compelled to include their Bank Verification Number (BVN) and account details while opening stockbroking accounts.
The commission on June 2 directed all Registrars of Public Companies to return all unclaimed dividends, which have been in their custody for 15 months and above, to the paying companies.
It said that registrars were required to file evidence of remittance not later than June 30.
The commission said failure to comply with the directive shall attract appropriate sanctions without further recourse.
(NAN)
