Economy

ICSAN urges review of Finance Bill 2021 on unclaimed dividends

Published

on

The Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) has called for review of Section 39 of the Finance Bill 2021 over its provision for take-over of unclaimed dividends of public listed companies.

Bode Ayeku, ICSAN President, made the call on Thursday in Lagos at the institute’s 44th annual conference, themed: Entrenching the Right Governance Framework for Economic Development and Sustainability.

The News Agency of Nigeria reports that the take-over is proposed to be done through the establishment of a trust to be known as unclaimed dividend trust fund.

NAN also reports that the Bill provides that unclaimed dividends of public listed companies that remain unclaimed for three years after declaration shall be transferred immediately to the trust fund either by the company or its registrar.

In addition, all unclaimed dividend of more than 12 years shall lapse into government revenue and shall be transferred from the trust fund to the federation account as federation revenue.

Any company that fails to transfer its unclaimed dividend to the fund commits an offence and was liable to five times the value of the unclaimed dividends with accumulated interests at the Monetary Policy Rate of Central Bank of Nigeria.

Ayeku said the section was a big disincentive to listing on the Nigerian Stock Exchange by companies and constrained those already listed to delist since the Bill targeted listed companies.

He noted that Principle 23 of the Nigerian Code of Corporate Governance 2018 (NCCG) provides for the “Protection of Shareholder Rights”.

Ayeku said that the right to dividend by the shareholders was one of the rights that companies and stakeholders must protect.

He, therefore, urged a review of the Section to make unclaimed dividends accessible to shareholders indefinitely and not forfeited by any company after 12 years, but be kept by the companies as stated in CAMA 2020.

This, he said, was because companies had contractual responsibility to pay dividends to shareholders and the Finance Bill had the implication of inducing a breach of such contract.

The ICSAN president urged government to focus on addressing the root causes of unclaimed dividends by requesting the various state governments to review their complex, unfair and exploitative probate processes.

He listed the processes to include the arbitrary valuation of assets of deceased leading to compromise by probate officials, high estate duty of 10 per cent which dependents of deceased were compelled to pay notwithstanding that probate.

Ayeku called for the creation of a timeframe maximum of two months for issuance of probate after receipt of complete documentation by the probate registry of each state to enable quick claim by executors of deceased shareholders.

“We request the Securities and Exchange Commission to further simplify the procedure for accessing unclaimed dividends by the shareholders such that one form can be used by affected shareholders to access all unclaimed dividends in PLCs.

“Existing shareholders should be allowed to update their information by nominating default beneficiaries with bank account numbers that dividends should be paid in case of death or disability of the shareholders.

“A section in the new Share/Bond application form (through the primary and secondary markets), Stockbroker/ CSCS account opening forms for default beneficiaries to be stated by investor in order to proactively reduce the volume of unclaimed dividend in future should be included.

“To ensure the safety of unclaimed dividends so that they can be accessed by shareholders indefinitely, companies should be mandated to invest unclaimed dividends only in government securities / gilt edge securities.

“The unclaimed dividends should not be transferred from the custody of companies that declared them to any institution, whether private or public, corporate or institutional, local or international,” he said.

Speaking on the theme of the conference, Ayeku said it reflected the realities that the nation’s economy was undeniably challenged on many fronts with many concerned stakeholders already being apprehensive of another recession.

“At the moment, we are experiencing shrinking of socioeconomic enterprises, rising inflation, fall in the value of Naira, low capacity utilisation in the real sector, retrenchment, among others.

“All these are aggravating the already very high rate of unemployment and the negative economic indices affecting national growth.

“Therefore, this year’s conference has aptly brought to the front burner the imperative of creatively exploring all avenues for finding solution to the nation’s socioeconomic regression through the right governance framework,” he said.

Edited By: Wale Ojetimi
Source: NAN

Rukayat Moisemhe

Rukayat Moisemhe: is a graduate and a professionally trained journalist, with experience in national news reporting/editing and verification at the News Agency of Nigeria. NNN is a media subscriber of the News Agency of Nigeria. NNN is a Nigerian online news portal that publishes breaking news in Nigeria, and across the world. Our journalists are honest, fair, accurate, thorough and courageous in gathering, reporting and interpreting news in the best interest of the public, because truth is the cornerstone of journalism and they strive diligently to ascertain the truth in every news report. Contact: editor[at]nnn.ng. Disclaimer.

Latest News

Innovation Accelerator to Stimulate Growth for Youth Promoting Democracy and Governance in Africa Concludes President’s Remarks at the 5th Annual Meeting of the Africa Economic Zones Organization (AEZO) December 3, 2020 Coronavirus – Africa: COVID-19 Update (3rd December 2020) Coronavirus – Zimbabwe: COVID-19 Update (2nd December 2020) Coronavirus – Zambia: Daily status update (2nd December 2020) Landmark Alliance Launches in Africa to Fight COVID-19 Misinformation Democratic Republic of Congo (DRC)’s President H.E Félix Tshisekedi confirmed to deliver the keynote address at Mining Indaba Virtual Local Currency Financing for Off-Grid Energy Solutions in Africa Limited, Needs Scaling Up – African Development Bank Report MEDIA ADVISORY : African Institute for Mathematical Sciences to Host Online Next Einstein Forum Global Gathering: 8-10 December 2020 AIMS to host its first online Next Einstein Forum Global Gathering SAP becomes the perfect medicine for Kiara Health’s complexities and cost challenges Blue Prism Intelligent Automation Now Available in AWS Marketplace WHO Africa Online Press Briefing: Responding to COVID-19 Misinformation in Africa Coronavirus – Kenya: Distribution of Cases by Counties (2 December 2020) Coronavirus – Kenya: COVID-19 updates (2 December 2020) SouthBridge Group announces Two Major Transactions in the Republic of Togo Fabio Aru signs for Team Qhubeka ASSOS Zimbabwean journalist Debra Matabvu wins the 2020 APO Group African Women in Media Award Signing of the Advisory Services Agreement between the Islamic Corporation for the Development of the Private Sector (ICD) and Xalq Bank, Uzbekistan African Energy Chamber Starts a Working Visit to Mozambique to Push for Natural Gas Adoption and Jobs Creation UN Global Compact partners with African Media Agency (AMA) on Virtual SDG Summit Over 3.3 million children vaccinated in Chad in large-scale polio campaign How the world’s highest HIV-prevalence country turned around, and in record time World’s governments must wind down fossil fuel production by 6% per year to limit catastrophic warming Gruesome Boko Haram Killings in Northeast Nigeria Foreign fighters a ‘serious crisis’ in Libya, UN mission chief tells high stakes political forum Ethiopian Government and UN strike deal for ‘unimpeded’ humanitarian access in Tigray Mali: COVID-19 and conflict lead to rise in child trafficking AERC to host Bi-annual Plenary on the COVID-19 Pandemic and Public Finance in Africa African Union to Launch the African Single Electricity Market (AfSEM) Communiqué on H.E. Moussa Faki Mahamat, Chairperson of the African Union Commission's two day working visit to the Republic of South Africa Coronavirus – Malawi: COVID-19 Daily Information Update (1st December 2020) Rugby: The General Assembly of the Rwanda Rugby Federation (RRF) Elected New Conflict and Resolution Committee Lionesses Graduate from Isuzu East Africa (EA) Life Skills Program Ecobank Group wins Awards from EMEA Finance, The Banker and Global Finance COVID-19 drives wages down, new International Labour Organization (ILO) report finds Coronavirus – South Africa: MEC Anroux Marais on suspension of summer initiation season due to Coronavirus COVID-19 pandemic Coronavirus – South Africa: COVID-19 statistics in South Africa (01 December 2020) Brown, Tanfield and Vinjebo sign-on for Team Qhubeka ASSOS Coronavirus – Nigeria: COVID-19 case update (1 December 2020) Coronavirus – Zambia: Daily status update (1st December 2020) Uniting Business for A Stronger Africa Coronavirus – South Africa: COVID-19 update for South Africa (1 December 2020) Coronavirus – Kenya: Distribution of Cases by Counties (1 December 2020) Coronavirus – Kenya: COVID-19 updates (1 December 2020) Coronavirus – Ethiopia: COVID-19 reported cases in Ethiopia (1 December 2020) Coronavirus – Zimbabwe: COVID-19 Update (1 December 2020) Nestlé partners with Nomanini and Standard Bank to empower informal retail traders across the Eastern and Southern Africa Region LaLiga signs Mondia group as strategic technology and commercial partner for Europe, Middle East, Africa and Asia Pacific African Energy Chamber projects Africa’s Power Demand to Keep Rising Between 4-5% per year