By Gbenga Agbana

Wednesday, 15 Dec 2010

The Institute of Chartered Secretaries and Administrators of Nigeria has urged the Federal Government to extend the expiry date for unclaimed dividends from six months to 18 months, to enable shareholders have more time to clear their dividend warrants.

The group also appealed to the National Assembly to throw out the Unclaimed Dividend Bill currently being debated, saying it did not protect the interest of shareholders.

On why the proposed bill should be thrown out, the group, in a statement signed by its Registrar, Mr. Dele Togunde, said, ”Government should comply with the provisions of Section 382(2) of CAMA CAP C20 LFN 2004, which states, that after the expiration of three months of the notice mentioned in sub-section(1) of this Section, the company may invest the unclaimed dividend for its own benefit in an investment outside the company and no interest shall accrue on the dividend against the company.”

He added that the government should also consider the provisions of Section 385 of CAMA which stated that dividends shall be special debts due to and recoverable by shareholders within 12 years and actionable only when declared.

He said, ”Unless and until the CAMA CAP LFN 2004 is amended or the above quoted Section is abrogated by the power of parliament, the proposed bill should be treated as null and void.”

Since the interest of the shareholders is not being protected, the bill should be thrown out at the third reading, so that the legislators can contend with more serious business.”

On the need to extend the expiry date of dividend warrants, Togunde said, ”Government should extend the expiry date of dividend warrant from six months to 18 months. Government should also be aware that after 12 years, unclaimed dividend lapse to company revenue, as part of the working capital. This is a generous period for any serious shareholder to make efforts to claim his or her dividend.”

Source: Punch