The federal government’s plan to take control of unclaimed dividends in the capital market through a new bill has been described as counterproductive, and may cause mass exit of quoted companies from the Nigerian Stock Exchange.
President of the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN), Mr. Bode Ayeku, gave the warning while speaking at the 44th annual conference of the institute held in Lagos recently.
According to him, section 39 of the proposed Financial Bill seeks to establish an Unclaimed Dividends Trust Fund for the transfer of idle shareholders’ reward of firms listed on the stock exchange for the use of the federal government.
He said if the dividends remain unclaimed for 12 years, the funds would become government revenue and would be transferred from the trust fund to the federation account as federation revenue, according to the new bill.
Ayeku sees this policy as counterproductive, noting that the federal government never made any attempt to solve the root cause of the unclaimed dividends in the first place.
According to him, this move could compel them to “re-register as private companies as recently done by some companies in order to avoid the take-over of their unclaimed dividends which are private funds.”
“I wonder why government is interested in the idle funds when it has already collected companies income tax of 30 per cent and education trust fund of 2 per cent from the profit of each company before the dividend was declared, in addition to another 10 per cent withholding tax from such dividend, notwithstanding that it did not invest in the shares of public listed companies generating these unclaimed dividends.”
