By Bashir Olanrewaju
Nigeria plans to convert all dividends issued by publicly quoted companies that are not claimed within 12 years into government revenue, according to provisions in the draft 2021 Finance Bill.
The bill provides for the creation of the Unclaimed Dividends Trust Fund, to which the proceeds would go after three years of not being cashed by the beneficiaries. All quoted companies will be required to render annual accounts of unclaimed dividends in their custody.
“All unclaimed dividend that has remained unclaimed for a period of not less than 12 years shall lapse into government revenue,” the bill says in section 39.
The total value of outstanding dividends issued by quoted companies in Nigeria stood at 158 billion naira as at July this year. They belong to people who may be deceased, who may have lost the documents needed to claim them or people who may simply not be aware they exist.
The proposal to appropriate the dividends have generated a lot of controversy, with many people outside government circles expressing opposition to it.
“Dividends are private properties of investors, either individuals or corporate entities,” Timothy Olawale, director General of the Nigeria Employers’ Consultative Association, told reporters in Lagos. “The idea of converting such private properties to federation wealth negates the relevant provisions of the rights to own property as guaranteed by the 1999 constitution.”