The Palm Wealth Shareholders Association (PWSA) has instituted a case against the government at Federal High Court of Nigeria, Abeokuta Division, Ogun State, asking the court to void the plan to take over unclaimed dividends.
The Federal Government had, in a section of the 2020 Finance Act, proposed the establishment of a trust fund where unclaimed dividends would be remitted.
Stakeholders said the new provision conflicts with the Companies and Allied Matters Act (CAMA), which guarantees a 12-year statute of limitation on unclaimed dividends, after which the fund would be ploughed back into the company.
At a 2020 Finance Bill webinar organised by KPMG in collaboration with the Ministry of Finance, Budget and National Planning, the Finance Minister, Zainab Ahmed, said the funds would be owed as perpetual debt to shareholders.
The Finance Act 2020, signed into law by President Muhammadu Buhari last year, provides that any unclaimed dividends of a public limited liability company quoted on the Nigerian Stock Exchange (NSE) and funds in dormant bank accounts for six shall be transferred immediately to the Unclaimed Funds Trust Fund.
PWSA is in court to stop the government from transferring the unclaimed dividends to the proposed trust fund.
The President of PWSA, Simon Emokeraro, said in a statement that the case, which has the Attorney General of the Federation and Minister of Justice, Minister of Finance, Budget and National Planning and the Accountant General of the Federation as parties, would be heard on February 25, 2021.
According to him, the shareholders are seeking among other things, an order “for the enforcement of the applicants’ fundamental rights to acquire and own immovable and moveable personal property and an order restraining the federal government, that is, the respondents from calling for or transferring the unclaimed dividends of the applicants in public quoted companies to the unclaimed Funds Trust Fund”.
“A declaration of the court that Part XV of the Finance Act 2020 calling for or transferring the unclaimed dividends of the applicants in public quoted companies to the Unclaimed Funds Trust Fund by the respondents without any constitutional grounds is unconstitutional, null and void and of no moment as it violates the applicants’ fundamental rights and a declaration of the court that the applicants are entitled to claim their dividends without coercion, stampede and intimidation from the respondents,” he added.