The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, yesterday, disagreed with the Independent Shareholders Association of Nigeria over plans by the Federal Government to take over unclaimed dividends worth over N150billion in the country.
While the minister insisted that the Federal Government has the right to borrow any unclaimed dividends that is lying fallow, the shareholders said such money should be returned to the companies that issued the dividends in the first place.
Mrs Ahmed and the other critical stakeholders made their views known during a public hearing on the Finance Bill 2020 organised by the Joint Senate Committee on Finance, Customs and Excise, Trade and Investment and National Planning in Abuja.
She said: “The Deputy Senate President, Ovie Omo-Agege, raised a question on the deposit in the various dormant accounts. I want to say that the same provision was made in the proposed amendments. The same provision that affects unclaimed dividends will also affect unclaimed deposit in the dormant accounts.
“On the issue of unclaimed dividends, what the government is proposing is in line with the provisions of the constitution. Any fund that is lying fallow after a certain period of time cannot be taken over but such funds could be borrowed.
“The Unit Trust is a borrowing arrangement of the government. At the moment, the Debt Management Office (DMO) issues securities to the registrars in case owners of such unclaimed dividends or deposit in dormant accounts come forward to claim their entitlement’’.
“The reason the DMO would be in charge of the unclaimed dividends and deposit in dormant accounts is because it has the mandate to manage debts on behalf of the government.
“That is why we recommend that the DMO as against the SEC (Securities and Exchange Commission) should manage the funds.
“It is possible that a different arrangement is in place in other jurisdiction but I want to state that in the amended CAMA, there is a provision that had modified the section that mandates the registrars to return unclaimed dividends after 12 years to the companies that paid the dividends in the first instance.
“Rather than the companies to collect back the money and redistribute, government wanted to manage the funds.”
But the National Coordinator, Independent Shareholders Association of Nigeria representing all the shareholders in the country, Mr Sunny Nwosu, insisted that unclaimed dividends are shareholders money and not government money.
Nwosu said: “It should never be entrusted in the hands of government or with any unclaimed dividends agency. Our position is that we are totally against issues that affect the dividends of a private investor. What government needs to do is to make it easier for people to get letters of arbitration. This will reduce cases of unclaimed dividends. People go to claim their dividends everyday; unclaimed dividends should be reverted to the company that issued it.”
