Starting from January this year, the Federal Government will begin to utilise the unclaimed dividends in companies listed on the Nigerian Stock Exchange and account balances of dormant bank accounts.
As part of the provisions in the newly enacted Finance Act 2020, the funds would be held in an Unclaimed Funds Trust Fund managed by the Debt Management Office and could be used to meet crisis-related needs of the government.
The Act stipulated that the dormant account must have been idle for a minimum of six years.
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It added that the unclaimed dividend and unutilised amounts in a dormant bank would be transferred to the Fund by either the company, registrar of deposit money bank.
Securities dealers in the Nigerian capital market have projected that unclaimed dividends would hit N200 billion by the end of 2020.
Section 77, subsection (2) of the Act stated, “From the commencement of this Act, any unclaimed dividend of a public limited liability company quoted on the Nigerian Stock Exchange and any unutilised amounts in a dormant bank account maintained in or by a deposit money bank which has remained unclaimed or utilised for a period of not less than six years from the date of declaring the dividend or domiciling the funds in a bank account shall be transferred to the Unclaimed Funds Trust Fund.”
It stated official bank accounts belonging to the Federal Government, States or Local Governments, or any ministry, department, or agency were exempted from this law.
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The Securities and Exchange Commission had kicked against this provision in the Finance Bill 2020 that prescribes that unclaimed dividends be handed over to the federal government as trustee.
Speaking at the public hearing of the bill organised by the Senate Committee on Finance, the Head of Department, SEC, Abdulkadir Abbas, opposed the government’s plan to supervise the unclaimed dividends, saying the Investment Securities Act mandated the commission to protect the interest of investors.
