New changes proposed for the Companies and Allied Matters Act (CAMA) in the draft 2021 Finance Bill seeks to create an unclaimed dividend and Balances Trust Fund expected to be domiciled in the Central Bank of Nigeria (CBN).
The proposal under Section 39 of the draft bill seen by BusinessDay establishes the unclaimed dividend and unutilized bank balance trust fund wherein dividends declared and unclaimed would be warehoused and owed as a perpetual debt to shareholders.
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Unclaimed dividends by investors in Nigeria hit a high of N158 billion as at June 2020.
The change corrects an anomaly under the CAMA which extinguishes shareholder’s right to dividend after 12 years and returns the money to the company for redistribution to other shareholders.
In its place thereof, it is proposed that such unclaimed dividends should be handed over to the Government, as trustee, in a perpetual fund created under supervision of the CBN and Debt Management Office (DMO), with private sector involvement in the governance of the Fund.
The liability to shareholders will no longer be extinguished after 12 years.
