NECA rejects Nigerian govt’s move to control N158bn unclaimed dividends

The Nigerian Employers Consultative Association (NECA) rejected Nigerian government’s bid to take over shareholders’ unclaimed dividends totalling N158 billion.

NECA’s reaction followed the government’s move to establish an Unclaimed Dividends Trust Fund as a sub-fund of the COVID-19 Crisis Intervention Fund, through Section 39 of the draft Finance Bill.

The agency said the federal government has no prerogative to manage unclaimed dividends as they were properties of investors, individuals and corporate organizations and called for Section 39 of the Finance Bill to be expunged.

The Director-General of NECA, Timothy Olawale, who stated these in a statement on Friday, added that the government’s plan to turn shareholders’ returns on investment to federation’s wealth negated the provisions of the rights to own property as guaranteed by the 1999 Constitution.

Read also: NECA estimates organized private sector loss from protests at N5tn

He said: “Why is the government which has already collected Companies Income Tax of 30 percent and Education Trust Fund of two percent from the profit of each company before dividend was declared, in addition to another 10 percent withholding tax from such dividend, still interested in taking over the unclaimed dividends.”

The law is set out in tune with Sections 432 and 429 of the Companies and Allied Matters Act 2020, a provision which empowered the company announcing a dividend to invest it in a business other than its line of operation when the three months of publication of the unclaimed dividends has elapsed.

The NECA chief observed the recovery process of the dividends remained unresolved, given that the legislation was vague about how the nation’s accountant-general would take up the role of companies’ registrars to execute settlement of unclaimed dividends.

He expressed concern on how the country’s account general would go about the confirmation of shareholders’ data, which is crucial in establishing the identity of the dividends’ rightful owners.

Olawale added: “Where would the application of the unclaimed dividend be submitted, and money collected by the shareholders – the office of AGF in Abuja or in major cities in Nigeria?”

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now