Investors in the Nigerian capital market have expressed disgust over the plan by the Federal Government to take over the N158 billion outstanding unclaimed dividend in the market.
They described the action as robbing shareholders of their hard-earned money and called on the National Assembly to reject the Bill.
The FG through a draft Finance Bill 2020 is seeking to vest unclaimed dividends in the government through the transfer of dividends that have remained unclaimed for a period of 12 years from Unclaimed Dividend Trust Fund to be established by the government to the federation account as federation revenue.
Reacting to this development, Mr. Patrick Ajudua, National Chairman, New Dimension Shareholders Association of Nigeria, wondered why the government is interested in setting up an agency to manage the unclaimed dividends when the Securities and Exchange Commission (SEC) has been doing all it could to address the issue.
He stated that the unsolicited attempt in the Finance Bill to set up an agency is an attempt to corrupt the unclaimed dividend, usurp the powers of shareholders and that of the apex regulatory body of the capital market, the SEC.
“The question to ask is why is the government showing much interest in setting up an agency to supervise the Fund, and also trying to cover their unsolicited advice by saying that the intention of the Bill is to remove the barrier of 12 years placed on unclaimed dividend by law.
In his comments, Igbrude Moses, President, Issuers and Investors Alternative Dispute Resolution Initiative (IIADRI), said the government does not have any moral justification to take such steps after taking 40 percent in form of tax from the same dividend.
He noted that the move is unacceptable, inhuman and would militate against investment in the economy.
He stated: “The government that wants investors to invest in the economy is the same government that wants to take away the proceeds of such investment through the back door just because shareholders did not claim it on time. The government has forgotten that it has taken over 30 percent tax from companies that generated the dividends on profit before tax and 10 percent from the individual investors through withholding tax on any dividends declared by companies.
“I am appealing to the National Assembly to reject and expunge in its entirety that section of the Bill because to all intents and purposes, the Unclaimed Dividend Trust Fund is designed to collect the hard-earned money of innocent Nigerians.
“Otherwise, how do you expect a shareholder with N1,000 unclaimed dividend in Lagos or other parts of Nigeria to apply to the Accountant-General and subject to the Minister’s approval to claim such dividend? How fixable and economical is such arrangements?
“We want those behind this proposal to have a rethink, otherwise, they are in for a long legal battle with the shareholders.”