Strategic initiatives on how government can facilitate the deployment of the multi-billion Naira unclaimed dividend as palliative to certain Nigerian shareholder families at a time of Covid-19, have been put forward by the President and Chairman of Institute of Chartered Secretaries and Administration of Nigeria, ICSAN, Bayo Ayeku .
While owners of this money and their families have been severely affected by the economic difficulties, a condition worsened by Covid-19, they cannot access their money due to avoidable bottlenecks and bureaucracies.
As at December 2019, the unclaimed dividend in Nigeria amounted N130 billion from N103.1 billion in December 2016 and the amount keep increasing.
Some of the preventable challenges that make it difficult to access the money include multiple forms for shareholders to process, difficulties of approaching individual registrars and payment of mandatory 10% of the fund for letters of administration from the court.
To therefore make it easy for many of them to access the fund to alleviate the biting economic hardship, Ayeku who spoke to BussinessDay recently suggested to the regulatory authorities to simplify the process by designing a simple form where the shareholders will list all the companies where he/she has outstanding dividend.
The form will be submitted to one registrar who will process his own aspect of unclaimed dividend and electronically forward to the next registrar. Ayeku suggested that there must be time frame for each registrar to make the process more efficient.
What this means is that submission of one form entitles the shareholder to the unclaimed dividend instead of the rigorous movement of compelling them to visit one registrar after another. Ayeku was of the view that if this step is taken, not less than 30% of unclaimed dividend will be claimed by the shareholders because the system is now using one stop shop approach for solution.
The ICSAN president also believed why majority of the families of shareholders are not processing letters of administration from the court is because many don’t have the 10% money to pay to the government upfront. “Some families who are struggling to survive will find it difficult to raise 10% of the money to pay. They know they have money there, but the challenge is that they must first get the 10% to retrieve the rest money”.
According to him, the reversal of the process will allow many of the families to come forward for their unclaimed dividend. He said the authorities can mandate the courts that any application submitted and the court ascertains that its 10% is guaranteed after other deductions, the probate registrar should write to the bank or to the registrar to make such deduction immediately when the estate account is opened
“If this is done, the beauty of it is that, nobody will have the challenge of raising loan to pay government in order to process unclaimed dividend. The process is not only to reduce unclaimed dividend but to empower Nigerians. It is an irony that somebody is poor whereas he/she has huge amount somewhere”, Ayeku said.
He also challenged the firms that are assisting people to process letters of administration to be proactive and smart enough to take their fees from the unclaimed dividend instead of asking the families to pay upfront.
The unclaimed dividend keep increasing due to several reasons including death of shareholders, change of addresses by shareholders and unwieldy process in claiming the dividend, and lack of knowledge by the shareholders of their status of their shareholding in many companies. To reduce the amount, Securities and Exchange Commission came up with e-dividend payment system.
