PZ Cussons Shareholders Lose N160m
By Dipo Olowookere
Some shareholders of PZ Cussons Nigeria Plc have lost about N160 million in dividends over their failure to claim them for more than 12 years.
According to Nigerian law, when dividends paid to shareholders by a company are not claimed for a period of 12 years, they are returned to the organisation.
Section 385 of the Companies and Allied matters Act, Cap C20, Laws of the Federal Republic of Nigeria, 2004 states that, “Dividends shall be special debts due to, and recoverable by, shareholders within 12 years, and actionable only when declared.”
When these cash rewards are not claimed by beneficiaries and refunded to the company, they became statute-barred, meaning they cannot be recovered by the owners.
Over the weekend, PZ Cussons released its audited financial statements for the year ended May 31, 2020, and according to the firm, the sum of N160.1 million was returned to the organisation as unclaimed dividends for 12 years by its registrar, First Registrars Limited, during the financial year.
In the analysis of the financial accounts by Business Post, it was observed that the N160 million was transferred to the retained earnings of PZ Cussons.
A critical look into this development showed that in the previous fiscal year, 2019, the amount of unclaimed dividends forfeited by shareholders of the company stood at N83.4 million.
The issue of unclaimed dividend in the Nigerian capital market has been a source of worry for the Securities and Exchange Commission (SEC).
The agency, as part of efforts to address this problem, stopped the posting of dividend warrant to shareholders and asked companies to adopt e-dividend, which ensures that the payments are made directly into the bank accounts of beneficiaries.
According to SEC, there are over N158 billion unclaimed dividends in the nation’s capital market and from investigations, some of them include dead investors and those with identity issues.
“Right now, you will not get unclaimed dividends from new issues. Part of the problem of unclaimed dividend has to do with identity management, which we are doing all we can to educate the public on and engaging the various stakeholders to be able to get a lot of the information that we require,” the former acting Director-General of the agency, Ms Mary Uduk, had said in December 2019.
In August 2020, during the Capital Market Committee (CMC) meeting of SEC, the new DG of the commission, Mr Lamido Yuguda, expressed worry at the quantum of unclaimed dividends in the market, saying the commission will pay attention to issues around e-dividend.
“To this end, we shall be paying attention to issues around e-dividend and the quantum of unclaimed dividends we have. We believe that to make retail investors return to the market, their concerns must be addressed. Market conduct must also be improved, and bad behaviour rooted out,” the SEC chief said.
Business Post gathered that some investors have blamed registrars for the bottlenecks faced when trying to get the reward of their sweat.
But the SEC DG has said the agency will address these issues and work with registrars, the Central Securities Clearing System (CSCS) and stockbrokers to come up with easier ways of processing the unclaimed dividends.