- Stakeholders must resist government’s desire to sit atop unclaimed dividends
Wikipedia defines a trust as “a three-party fiduciary relationship in which the first party, the trustor or settlor, transfers a property upon the second party for the benefit of the third party, the beneficiary.” The trustor/grantor/settlor is the person who creates the trust. The trustee is the person who manages the assets in the trust. Of course, the beneficiary is self-explanatory. All the parties, from the first to the third party, are quite important in the mix. But the beneficiary is the ultimate loser should something go wrong with the arrangement.
It is in this context that we should see the objection by the Independent Shareholders Association of Nigeria (ISAN) to the proposed setting up of an unclaimed dividend trust fund to manage unclaimed dividends. The body made its position known at the public hearing of the Senate Committee on Finance, Trade and Investment and Public Procurement on the Finance Bill 2020.
As ISAN noted, successive governments have been expressing the desire to borrow from the unclaimed dividends. Somehow, that desire has always been truncated by constitutional provisions. The Buhari government, it seems, is hell bent on accessing this fund, hence its decision to set up the trust fund, under the management of the Minister of Finance. Of course that is a sure way of government having unfettered access to the funds. Indeed, this seems to be the propelling force behind the proposed law now undergoing public hearing in the senate.
We wonder why the President Muhammadu Buhari government and state governments seem to be exhibiting an insatiable desire to dip their hands in every available cookie jar. Indeed, we do not know what the business of the Federal Government is with dividends, claimed or unclaimed. The dividends belong to investors who are either individuals or corporate entities. A statement by ISAN’s national coordinator, Mr. Anthony Omojola, and founder, Sir Sunday Nwosu, puts the issue in perspective: “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 (memorandum and articles of association). 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.”
We note that this is the same way that governments have been coveting pension fund, with a view to borrowing from it, ostensibly for infrastructural development. Obviously the governments are oblivious of the distrust that exists in the minds of the average Nigerian on most of their intentions. The civic suspicion is such that the average Nigerian would first confirm whether it is not good morning when a public official says good night. And this is not the fault of the people; it is borne out of years of experience. Most governments in the country have been long only on words; short on action. They make political promises which they know they can never fulfill. Moreover, profligacy reigns supreme in many states, with some governors still oblivious of the dire economic situation we are in, given the kinds of programmes and projects they are embarking on.
In our view, instead of the governments looking for easy way out of every situation, they should endeavour to look inward. It is in situations such as the one the country is in that people know real managers from the pack. What our situation calls for is rigorous thinking on the part of public officials. We are not aware there is any part of this country that is not blessed one way or the other. All the states have one mineral resource or the other that can be exploited for the benefit of the people. But what has always obtained is that rather than the state governments rallying together to amend the laws putting such resources in the exclusive legislative list, they prefer to be going cap in hand to the centre to look for money, whether by way of monthly allocation or bailouts.
Unfortunately, the Federal Government itself is now in need of bailout and is therefore not in a position to dole out free funds to any state government.
The fact of the matter is that government cannot manage unclaimed dividends. Not only does the idea run counter to the letter and spirit of the 1999 Constitution on citizens’ right to ownership of property, whether movable or immovable, it also shows lack of creativity on the part of governments at all levels. Nigeria is not the only country where unclaimed dividends exist. It is common in both developed and developing countries. For instance, ISAN drew attention to both the United Kingdom and Australia that it said had between three and four billion pounds sterling and $1.1 billion Australian dollars of unclaimed dividends, respectively, as at the end of last year. The governments of those countries are not looking in the direction of dividend warrants for expropriation the way the Federal Government is doing with the proposed law on unclaimed dividends.
It is high time the governments ended the country’s over-dependence on crude oil. Moreover, governments in Nigeria are not known to be good managers of resources. That is why many people are able to steal large sums of money without anyone detecting on time. There are so many loose funds all over the place that governments can plug their leakages and therefore have more resources to utilise. Indeed, we wonder where all the monies at the disposal of the different governments in several parts of the country have ended up, because there is little to justify the stupendous budgets that are announced every year in many places. Our governments have a penchant for liquidating any money they find. The same fate should not befall unclaimed dividends.
The money belongs either to the dead and/or the unwary. It is irresponsible of government to exploit it. They should seek open ways to advertise and track them, their relations or families or beneficiaries as is legally practicable. There should be no sunset date for it. It is their perspiration, not government’s. Appropriating it is official theft and the state stealing from vulnerable citizens by blindsiding them.
Rather than covet unclaimed dividends, a caring government would help strengthen the existing structures such that they can locate the owners. Even if the owners are dead, it is still not the government’s business to want to acquire such funds. The owners expressed the desire to have the funds utilised by the firms in which they invested and not the government, which has taken its own share of the funds through various taxes. It is unfair and immoral to look for new owners for unclaimed dividends.
