Time to re-visit Unclaimed Dividends Bill

The National Institute for Legislative Studies (NILS) has called for the re-visitation of the Unclaimed Dividends Bill which was brought before the National Assembly in 2010.

NILS Legal Adviser, Dr Abdulrameed Yusuf, made the submission in a paper presentation at a Workshop on Companies and Allied Matters Act on Thursday in Abuja.

The title of Yusuf’s paper is: “Proposing Amendment to Companies and Allied Matters Act (CAMA), 1990: Some Random Thoughts”.

He regretted that companies tried to locate shareholders when they were about to purchase the shares but would not contact them when it was time to share dividends.

Yusuf said that under Section 382 of CAMA, dividends returned to the company as unclaimed after the expiration of three months might be invested for the company’s own benefits.

According to him, under Section 385 of CAMA, if after 12 years, such dividends still remain unclaimed, the company shall convert such proceeds to company capital.

“The combined effect of these provisions is that many public companies have continued to convert unclaimed dividends to company capital because minimal or no effort is made to trace this category of stakeholders.

“In 2010, the Securities and Exchange Commission facilitated the drafting of an unclaimed dividend which has been before the National Assembly for the establishment of Unclaimed Dividends Commission to take custody of these funds.

“But till today, the bill has yet to be passed into law.

“This suggests that an amendment to CAMA in this regard needs to make it mandatory for public companies to publicise the names of unclaimed dividends shareholders in at least three national dailies after the expiration of 12 years provided by CAMA.

“If they remain unclaimed after six years, then the company should be allowed to sell such shares and the proceeds should be added to the company’s corporate social responsibility fund.’’

The legal adviser said that in the era of Information Communication Technology, dividends could be transferred into beneficiaries account as the beneficiaries could be reached by phone, email or social media.

He advocated the establishment of Business Regulatory Commission for continuous regulation, supervision and monitoring of corporate organisations.

Yusuf said that such commission would be responsible for the day to day corporate supervision, thereby making the Corporate Affairs Commission(CAC) more efficient .

In his presentation, Mr Bello Mahmud, Registrar, CAC, said that the commission had earlier constituted an in-house committee to look at business laws that needed amendment.

He said that the committee made 250 recommendations which had been produced in soft and hard copies.

Represented by Mr Justine Nidiya, Deputy Director, Complaints, Bello listed some of the key areas of review as-number of persons required to register a company and provision for the investigation of companies.

Some other areas, according to Bello, are provisions for e-meeting and upward review of registration fee.

Earlier in her remark, the Director-General of NILS, Dr Ladi Hamalai, said that the event provided an opportunity to harmonise suggestions by the Law Reforms Committee,  Dogara Committee and NILS.

The committee to review existing laws and law reform was inaugurated by Mr Yakubu Dogara, the Speaker of the House of Representative on July 23, 2016.