By Goddy Egene
Shareholders under the aegis of Independent Shareholders Association of Nigeria (ISAN) have restated their objections to the plan by the federal government to set up an Unclaimed Dividend Trust Fund.
The shareholders stated their position during a public hearing of the Senate Committee on Finance, Trade and Investment and Public Procurement on the Finance Bill 2020.
In a statement signed by National Coordinator, Mr. Anthony Omojola and Founder, Sir Sunday Nwosu, ISAN said dividends are private wealth of investors, either individuals or corporate entities and the idea of converting such private wealth to federal government’s revenue negates the relevant provisions of the rights to own property and asset as guaranteed by the 1999 Constitution, as amended.
The shareholders noted that to the extent of its inconsistency with the 1999 constitution, the proposed trust fund was null and void, insisting that the law expressly states that there shall be no forceful takeover of any private moveable or immovable property of any Nigerian without due and appropriate compensation and or valid court order.
“It is nothing short of expropriation which the constitution forbids. Dividends, including unclaimed dividends, are fund generated by private companies and made available to its shareholders in line with the provisions of Companies and Allied Matters Act (CAMA) and the Company Memart.
“That these funds are available only after the company has paid a host of taxes, including Companies Income Tax Act (CITA), Educational Trust Fund (ETF) and tax of about 32 per cent of gross profit is paid to the federal government and 10 per cent withholding tax on the shareholders for every dividend declared,” ISAN stated.
According to them, it was clearly overreaching and unacceptable for government to seek to expropriate the unclaimed dividends under the subterfuge of any revenue, noting that companies and individuals have a right to private properties and assets of which unclaimed dividends funds falls into.
They said the the philosophy behind the decision to appropriate unclaimed dividends is wrong, as returns on investments cannot be time barred by any progressive government.
They noted that the thinking that the cancellation of rights after 12 years is unconstitutional and the notion that expropriation is to cure an alleged unconstitutional wrong is also wrong, describing this as an inverse legal thinking that will lead to another unconstitutional mess.
“The unclaimed dividends belong to shareholders of companies and there is adequate provision that in the event of failure to claim; that such fund should revert back to the operations of the company. There are good structures around this position. Further, recovery by shareholders has thus been seamless. Rather than try to expropriate, government should enhance the structures,” ISAN said.