Shareholders wary of SEC’s unclaimed dividend trust fund
Discordant tunes have continued to trail the Securities and Exchange Commission (SEC’s) move to establish Unclaimed Dividend Trust Fund (UDTF), even as capital market investors urge the regulators to simplify letters of administration for the families of deceased persons to facilitate access to dividend claims.
Investors, who spoke in a separate interview with The Guardian, described the trust fund as unnecessary and conflicts with the provisions of the Companies and Allied Matters Act (CAMA), upon which the laws governing shareholders’ unclaimed dividend in the nation’s capital market is currently derived.
The law guarantees a 12 year statute of limitation on unclaimed dividends, after which the fund is ploughed back into the company that declared the dividend.
Explaining their aversion to the proposed fund, investors noted that experiences in the past have shown that any fund under the supervision or control of the government is misappropriated and converted for other uses.
Besides, they argued, the value of the unclaimed dividend estimated at 117 billion had reduced significantly with the application of the already existing CAMA law on unclaimed dividend.
The SEC, in an effort to reduce the incidence of unclaimed dividend, recommended the establishment of the UDTF, to be managed by an independent Fund Manager, supervised by the Board of Trustees, and regulated by the Commission.
It also recommended that members of the Board of Trustees be selected from the capital market with representation from the following institutions: Federal Ministry of Finance, SEC, Institute of Capital Market Registrars, Shareholders’ associations recognised by the Commission, Nigerian Employees Consultative Association (NECA), and such other persons as may be determined by the Minister of Finance.
But market investors suggested that instead of creating a trust fund for the unclaimed dividends, a little fine-tuning of the existing law. Particular focus should be in the areas of simplifying letters of administration for the deceased family, and making the process of claims less cumbersome and rigorous will reduce the high level of unclaimed dividend to the barest minimum.
Furthermore, they opined that the existing law on unclaimed dividend has not been reviewed; therefore, pending which there should be no amendment on the matter.
Specifically, the National Coordinator, Renaissance Shareholders Association, Olufemi Timothy, described the establishment of the trust fund as unnecessary.
“The issue of unclaimed dividend trust fund is not necessary. This fund actually belongs to shareholders and shareholders have not been complaining. I think the regulators could only interfere when people are complaining, but when people don’t have complaints, and you just discover that there is a bulk money somewhere, and some people are interested in taking the money which does not belong to them is wrong, its corruption, its fraud.