A Financial Expert, Mr Okechukwu Unegbu, has advised the Federal Government to observe due process in its plan to use unclaimed dividends and dormant bank accounts to finance its expenditure.
Unegbu, a past President of Chattered Institute of Bankers, gave the advice in an interview with News Agency of Nigeria (NAN) on Sunday, in Abuja.
He said that the idea of the government acquiring the funds would deny the owners their right of ownership, so government should use the option of investment outlets to invest such dividends in bonds, and make them profitable.
“We know that the government needs money but it is not advisable to deprive people of their investments.
“The government can use investment outlets to acquire these dividends and invest them in bonds, which is secure.
“It is not correct to say that the owners are not known because in any listed company shares ownership is known.
“Government should not acquire them without due process. The law provides that if after 12 years the dividend remains unclaimed it should be reverted back to the company that issued the shares,’’ he said.
He added that after fulfilling its tax obligations to the federal government over the years, the companies reserved the right to keep the dividend.
In a similar vein, dormant accounts were the private property of people, which the government cannot just take over.
Unegbu suggested that government should use government security to acquire them instead of using a trust fund, saying that the banks were to blame for leaving some accounts dormant instead of contacting next of kin of their owners.
“The major problem is the banks. They are supposed to contact the next of kin of the people who owned such dormant accounts.
“I will advise that we use government security to acquire such funds and make them profitable, rather than using a trust fund,’’ he said.
NAN reports that the Federal Government recently announced its decision to securitise unclaimed dividends and dormant account balances of up to six years.
In the recently passed 2020 Finance Act, the management of unclaimed dividends and dormant account balances was captured as part provisions intended to mitigate fiscal frailties and economic crunch caused by the emergence of COVID-19.
The Act provides that funds realised will be placed in a trust fund, to be managed by the Debt Management Office (DMO), whose responsibility also included payment of claims for such dividend and the accompanying compensation for accrued interest.