Economy analysts and legal practitioners have insisted that the plans by the Buhari- led government to borrow the unclaimed dividend standing at about N200 billion will erode investor confidence.
Due to the question of trust, the analysts posit that if government is allowed to manage the funds, it will likely erode investor confidence which will even lead to some quoted companies de-listing from the capital market.
Owing to shortage of revenue, especially from oil to fund economic development, Buhari-led government recently sent a bill to National Assembly proposing that the unclaimed dividends be managed on behalf of shareholders through Unclaimed Dividend Trust Fund.
But in his view on the legality of the proposal while speaking on Channels Morning programme recently, the President of Institute of Chartered Secretaries and Administrators of Nigeria, ICSAN, Bode Ayeku described the proposal as very strange believing that if the proposal sails through, a lot of listed companies will delist as there will be loss of confidence.
According to him, why shareholders buy shares is to earn dividend, and if a third party is trying to expropriate what belongs to shareholders, it is contrary to the right of the shareholders, Ayeku said. The move is also contrary to the provisions of the Nigerian Constitution.
What makes the intention of government of the planned expropriation of the unclaimed dividend unfair, is that government had already collected 30% as corporate tax, 2% as education tax and 10% withholding tax which brings it to a total of 42%.
“Now government is saying that it wants to be interested in the remaining 58%. Then the question is whether government has any investment in these shares”. Ayeku maintained that government should rather be interested on how to address the unclaimed dividend issue.
Also speaking on the programme, another legal practitioner, Jiti Ogunye agreed that Nigeria presently is going through rough times and that puts pressure on government to manage the economy which results to various means including borrowings but said if dividends are unclaimed, government should be extremely interested on how the dividends will be claimed.
The lawyer believed that when government manages the fund under the Unclaimed Dividend Trust Fund, there will likely be bureaucratic stone wall and bottlenecks when the shareholders wake up to claim their money even as little as N5,000 or N10,000.