By Peter OBIORA investadvocate

Nov 20 2010 12.51 GMT

Lagos (INVESTADVOCATE)-Victor Ogiemwonyi, Managing Director/Chief Executive Officer (MD/CEO) of Partnership Investment Company Limited, Member of the Nigerian Stock Exchange (NSE) has faulted the proposed Bill that would lead to an Act establishing unclaimed dividends Funds.

 

Ogiemwonyi made this affirmation to investadvocate Friday November 19 2010 in Lagos Nigeria.

 

“The proposed amendment to the Investment and Securities Act (ISA) in respect of Unclaimed Dividends lacks merit” he said.

 

In his views, he affirmed that the proposed law is not needed and would not be good for investors in the Nigerian Capital Market (NCM).

 

“My views are that the proposed law is not needed and will be bad for investors” Ogiemwonyi said.

 

Some of the reasons he advocated is as follows, the Act he said would infringe on the fundamental rights of individuals to property.

 

Another view according to the Market Operators is that Unclaimed Dividends are not the same as Abandoned Dividends. “Any investor currently can make a claim from standing Unclaimed Dividends at anytime, including his successor in title” he said.

 

Ogiemwonyi noted that there is no dispute as to the ownership of standing Unclaimed Dividends. “The rightful place for the domiciliation of the funds is with the company paying it in the first place” he said.

 

“Dormant accounts in Banks do not transfer ownership, no matter how long it takes the owner to make a case. The recent payment to Jewish survivors by Swiss Banks is a case in point” he affirmed.

 

According to him, if the Act is passed with its current proposals, “it will amount to creating interference in the Investment Markets” The Market Operators noted.

 

Ogiemwonyi further affirmed that the only thing needed to be added to the law about Unclaimed Dividends is to make companies disclose same in their Annual Reports and show movements on it on a yearly basis.

 

Some of the recommendations being advocated by him include the recommendation that the Government through the Securities and Exchange Commission (SEC) promote more vigorously full implementation of E- dividend payment policy.

 

Another one is the promotion of transparency by enforcing the ‘ know your customer’ (KYC) rules and to promote a sustainable Investor Education program.

 

This is coming on the heels of earlier reports by investadvocate that Shareholders of publicly quoted companies are vehemently opposing the passage of this Bill by the House Committee on Capital Markets.

 

Earlier Sir Sunny Nwosu, Shareholder Leader and National Coordinator, Independent Shareholders Association of Nigeria (ISAN) had in late July 2010 reacted to this Bill as proposed by the National Assembly.

 

Nwosu had affirmed that what determines unclaimed is after 15 months (one year and three months) after which a company is entitled to take back the funds and keep for the investors. “In fact what determines unclaimed is that after 15 months, the company will take back the funds and put it in a save custody for the shareholders” he said.

The Shareholder Leader also confirmed to investadvocate of the existence of a law in Nigeria making dividends unclaimed until after 12 years.

“There is no need tampering with people’s future by passing a law to empower some individuals to take what does not belong to them. Nwosu said.

Prior to this time, SEC had affirmed that unclaimed dividends was estimated to be N2.09 billion as at the third quarter (Q3) of 1999, and then the figure rose significantly over the years to about N17.9 billion as at December 2008.

Now unconfirmed Reports put the figure of Unclaimed Dividends in Nigeria to an estimated N20 billion.

The House Committee on Capital Markets National Assembly has scheduled public hearing on the issue between November 24 and 25 2010 in Abuja Nigeria. investadvocate will keep you informed on the latest development on the outcome of the hearing.