Last week, the
The President/Chairman of
Olugbemi said efforts made by regulators and registrars had helped to reduce the level of unclaimed dividends in the nation's capital market. He said the value of dividends currently being declared by companies were huge compared to 10 years ago.
Olugbemi, who is also the Managing Director,
"Years back the percentage of unclaimed dividends was around 24 per cent. But we have reduced it to below 20 per cent, 10 per cent and 5.05 per cent in
He promised that stakeholders in capital market would do more to further reduce the level of unclaimed dividends.
The chairman said some of the big banks in the country which paid dividends below N10 billion in past years, paid over N54 billion dividends in 2013. He said in 2013
Olugbemi said registrars would not relent in their efforts to make the capital market more attractive to investors.
Unclaimed dividends in
The continued retention of such dividends by public companies most times distorts their true financial position thereby misleading investors and government.
Seven years ago, the
The commission directed that share application forms in respect of public offering of securities shall include information on next of kin and bank account number, amongst other recommendations.
But the recommendation for the establishment of the
The fund, according to the
Al-Faki had on receiving the report of the national committee on unclaimed dividends, visited Olusegun Obasanjo, who was then the President of the
Membership of the committee was to comprise representative of
A bill to give the fund a legal backing was then drafted and sent to the
A new twist Four years after the issue had been laid to rest, a similar bill with a wider scope found its way into the
The fresh bill for an Act to establish the
As usual, stock market operators and stakeholders in the Nigerian capital market opposed the bill and nothing has been heard of it since then. Stakeholders who spoke to THISDAY at that time said corporate Nigerian must rise to ensure that the bill do not see the light of the day, stressing that passing the bill would give government agencies the opportunity to dip hands into private investors funds.
A way out? The Registrar/Chief Executive, ICMR, Dr.
According to Ogogo, "the creation of undue bureaucracy through the establishment of a board and full secretariat to be occupied mostly by government appointees and employees without providing adequately for the cost of the establishment of the fund is extremely worrisome to shareholders.
If that bill is passed, unclaimed dividends are no longer safe as all expenditures, which include but not limited to staff salaries, pensions, travel expenses, among others would defrayed from the funds.
"This will certainly threaten the safety of the fund if dividend monies of shareholders are used for this purpose. It does not amount to protecting the investors, a reason, which the establishment of the fund sees to achieve," he said.
Ogogo added that the level of investors' confidence seen in the market is a reflection of the transparency of all activities and level of honesty displayed by operators.
Reasons for unclaimed dividends The major causes of unclaimed dividends have been identified to include: Frequent changes in postal addresses and non-notification of such changes to the registrar by members, inefficiency of the registrar to respond adequately to investors enquiries because of their workload and uncomputerised services. Others are death of an investor, defective postal system, insistence by most banks on using only current accounts for payment of dividends which most small investors do not have.
Who owns unclaimed dividends Unclaimed dividends belong to the investors. The company only holds it in trust which has to be safeguarded in the interest of the owners. Section 382 of the Companies and Allied matters Act 1990 allows a company to invest any unclaimed dividends for its own benefit at the expiration of three month notice to its members; no interest shall accrue on the dividends against the company.
However, after 12 years the unclaimed dividends become statute barred as stipulated by the CAMA and will be taken over by the company.
Shareholders' position Speaking on the development, National coordinator,
"They are not doing anything in our interest, I call on all shareholders, corporate
"If this bill is allowed to see the light of the day, investors will no longer have confidence in the market and so will look elsewhere to invest their monies. This will be so because the bill is all about taking and spending the hard earned benefit of shareholders. The impact on the capital market will be negative," he said.
Nwosu who said the bill will hit the brick wall, noted that if passed, it would amount to a case of 'robbing Peter to pay Paul', as shareholders may lose the monies within a shorter period of time than 12 years, which was the length of time allowed before the dividend becomes statute barred.
"What I am saying is that companies must get up to their responsibility and educate the law makers to understand that there is a law guiding this issue and that they cannot take what does not belong to them while the shareholders will be doing their own bit about that." he said.
On his part, National Chairman,
He noted that shareholders form the fulcrum over which all other activities in the capital market revolve and so they must respect their feelings to help move the market forward.
Okezie said if adequate investigation is carried out, it would be discovered that those behind the bill do not know anything about capital market operations.
Most Popular Stories
- Homeowners More Satisfied With Mortgage Servicers
- Russia, Ukraine Now Face Off Over Football Clubs
- Obama Vows to Veto House Immigration Bill
- Body Parts Retrieved at MH17 Crash Site
- Motorists Get Rare Summer Break on Gas Prices
- Government Meets Goal for Small-business Contracts
- MassMutual Teams Up With ALPFA
- Chrysler U.S. Sales in July Hit 9-Year High
- Law Lets Users Unlock Cellphones
- Reno Gigafactory No Cinch to Land Tesla Plant