By Babajide Okeowo
Shareholders associations in the country are unanimous in their assertion that after collecting Company Tax from companies and Withholding Tax from individuals, the Federal Government lacked the moral right to borrow any unclaimed dividends from the same companies and individuals.
This is coming on the heels of the resolve of the FG to borrow about N895 billion from unclaimed dividends and dormant account balances.
To this effect, shareholders under the aegis of Independent Shareholders Association of Nigeria (ISAN), and New Dimension Shareholders Association, warned the Federal Government to shelve the plan, as it has not been a good borrower and cannot be trusted given its inability to curb corruption and wastage in its various agencies.
“Government that is supposed to protect its citizens wants to rob shareholders through this Unclaimed Dividend Trust Fund. The same government that wants investors to invest and grow the economy is the same government that wants to take away the proceeds of the investment just because shareholders did not claim it on time.
The government has forgotten that it had taken over 30% tax from the companies that generated the dividends from profit before tax, and another 10% from the individual investors through withholding tax on any dividends declared by companies. What moral right does the government have to take the money?
“Section 39 (f) of the Finance Bill stated, ‘All unclaimed dividend that has remained unclaimed for a period of not less than 12 years shall lapse into government revenue and shall be transferred from the Unclaimed Dividends Trust Fund to the Federal Account as Federal Revenue.
This is unacceptable and inhumanity to man. This would definitely erode investors’ confidence and militate against investment in Nigeria. We want those behind this proposal to have a rethink, otherwise, they will be in for a long legal battle with the shareholders.
We are appealing to the National Assembly to reject and expunge in its entirety that section of the Bill because from all intent and purpose, the Unclaimed Dividend Trust Fund is designed to rob innocent Nigerians of their hard-earned money” Moses Igbrude, Publicity Secretary of ISAN said.
On his part, the President of, New Dimension Shareholders Association, Patrick Ajudua, argued that borrowing or setting up a trust fund for unclaimed dividends would create another opportunity for wasteful spending, insisting that the unclaimed dividends should go back to the companies.
He decried that the government has remained insensitive to the plight of listed firms and the capital market that generated the dividends through the years.
He said it was not only unacceptable but a disincentive to investment, and appealed to the National Assembly to reject and expunge the section of the bill, adding that borrowing it is another means of robbing shareholders of their hard-earned money.
“For us shareholders, it is unfortunate that the government has decided to annex money that does not belong to them to cover their hidden intentions.”
Initially, it was setting up a trust fund, and now they want to borrow; do you borrow money not given to you freely?
“Rather than encourage listed firms by ploughing it back into these companies to boost their operations in this era of the pandemic, they decided to annex it forcefully, thereby discouraging retail investors from investing in the market,” he said.