SEC, shareholders fault takeover of unclaimed dividends, dormant accounts
Shareholders and the Security and Exchange Commission kicked against the plan by the Federal Government to take over the management of unclaimed dividends and deposits in dormant bank accounts in the country.
They expressed their objection at a one-day public hearing organised by the Senate committees on Finance, National Planning, Banking, Customs, Trade and Investment on the proposed amendments to the Finance Bill 2020.
The bill is seeking amendments into 12 Acts of Parliament relating to capital gains tax, personal income tax, Customs and Excise Tariff, Companies Income tax, Value Added Tax and Stamp duties among others.
Trouble started after the Minister of Finance and National Planning, Mrs Zainab Ahmed, disclosed plans by the Federal Government to borrow and manage the unclaimed dividends in the stock exchange.
The minister also reacted to the Deputy Senate President, Ovie Omo-Agege, who raised a question on whether the government would also take over the deposit in the various dormant accounts.
She said, “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 funds that is lying fallow after a certain period of time cannot be taken over but such funds could be borrowed.
“The Unit Trust being proposed is a borrowing arrangement of the government.
“The reason the Debt Management Office 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 should manage the funds.”
“Rather than the companies to collect back the money and redistribute, the government want to manage the funds.”
The Chairman of the Senate Committee on Finance, Senator Solomon Adeola, asked the minister what would happen if the DMO takes over the management of the funds and the owners of the unclaimed dividends or deposits in the dormant accounts showed up.
Ahmed said the trust fund management to be set up would give details of the procedure of how the funds would be managed.
Adeola said the committee would be interested in making sure that the proposed amendments spelt out the details explicitly.
The representative of SEC, Abdulkadir Abbas, said critical stakeholders in the capital market had inundated the commission with complaints over the proposal to set up the unclaimed dividends trust fund.
Abbas said SEC had come up with innovations over the years to minimise cases of unclaimed dividends.
He said, “We are advocating a modification of the provisions with regards to management and governance of the trust fund to avoid possible harm to the capital market which is still struggling to survive.”
Asked by the committee to declare the total amount of the unclaimed dividends in the country, Abbas said it was over N150bn.
He said, “We are not against the proposal to set up the unclaimed dividends and balances trust fund.
“What I said is that we have concerns with respect to the governance structure of that proposed fund and appealing for reconsideration.
“SEC being the capital market regulator and mandated by the Investment Securities Act to protect the interest of the investors should be the one to administer or to manage or to supervise the operation of that fund.”
The National Coordinator emeritus of the Independent Shareholders Association of Nigeria, Sunny Nwosu, spoke for shareholders.