A Federal High Court sitting in Abeokuta has granted an interim
order restraining the federal government from taking over the
unclaimed dividends of shareholders in the capital market estimated
to be over N200 billion. The order followed a suit instituted by
shareholders under the aegis of Palm Wealth Shareholders
Association (PWSA).
![image](/2021/07/Justice-Ejembi-Eko-1.jpg")
![image](/2021/07/lawpv.jpg")
The Finance Act 2020 signed into law last February by President
Muhammadu Buhari provides that any unclaimed dividends of a public
limited liability company quoted on the Nigerian Exchange Limited
(NGX) and any unutilised amounts in a dormant bank account
maintained in or by a deposit money bank, which has remained
unclaimed or unutilised 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 immediately to Unclaimed Funds
Trust Fund.
![image](/2021/07/escrow-service1.jpg")
But shareholders and other stakeholders in the financial sector
had faulted the proposal. As part of efforts to stop the federal
government from taking over the funds, PWSA instituted a case
against the government at the Federal High Court in Abeokuta.
The shareholders (Applicants) sued the Attorney General of the
Federation; Minister of Finance, Budget and National Planning; and
Accountant General of the Federation as Respondents and
Representatives of the Federal Government of Nigeria in the Suit
NO. FHC/AB/FHR/14/2021. The applicants sought an order restraining
the respondents from calling for or transferring the unclaimed
dividends of the applicants from their respective companies to the
Unclaimed Funds Trust Fund in accordance with Part xv of the
Finance Act, 2020.
Hon. Justice J. O. Abdulmalik last Friday, July 23, granted
interim orders restraining the respondents from bringing into force
the “proposed new rules on unclaimed dividends (E-dividend mandate)
or any new rules on unclaimed dividend not in force before 31st
December, 2020.”
The court also restrained the federal government from harassing,
intimidating, inviting and/or ordering public limited liability
companies or their Registrars for questioning for purpose of taking
or giving accounts of the unclaimed dividends, pending the
determination of the Motion on Notice.
A copy of the judgment showed that the case was adjourned to
October 25 for hearing of the applications as well as the
substantive matter.
The chairman of PWSA, Mr. Simon Emokeraro, said the shareholders
were seeking “an Order of the Honourable Court for the enforcement
of the applicants’ fundamental rights to acquire and own immoveable
and moveable personal property; 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; an order
restraining the Respondents from harassing, intimidating, inviting
the companies or their Registrars for the purpose of transferring
the unclaimed dividends belonging to the applicants to the
Unclaimed Funds Trust Fund contrary to the Constitution of the
Federal Republic of Nigeria 1999 (as amended), the African Charter
on Human and People’s Rights Act, Laws of the Federation.
“Others are: an order of the Honourable Court restraining the
Respondents from borrowing the unclaimed dividends belonging to the
applicants; a declaration by the Honourable Court that the
applicants have rights guaranteed and protected under sections 43 &
44 of the Constitution of the Federal Republic of Nigeria, Articles
14 and 24 of the African Charter on Human and People’s Rights and
Article 17 of the United Nation’s Charter on Human Rights 1945 and
sections 42 (1) and (2) of the Companies and Allied Matters Act; a
declaration of the Honourable Court that Part XV of the Finance Act
2020 calling for or transferring the unclaimed dividends of the
applicants in public quoted companies to 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 Honourable
Court that the applicants are entitled to claim their dividends
without coercion, stampede, and intimidation from the
respondents.”
A Federal High Court sitting in Abeokuta has granted an interim
order restraining the federal government from taking over the
unclaimed dividends of shareholders in the capital market estimated
to be over N200 billion. The order followed a suit instituted by
shareholders under the aegis of Palm Wealth Shareholders
Association (PWSA).
The Finance Act 2020 signed into law last February by President
Muhammadu Buhari provides that any unclaimed dividends of a public
limited liability company quoted on the Nigerian Exchange Limited
(NGX) and any unutilised amounts in a dormant bank account
maintained in or by a deposit money bank, which has remained
unclaimed or unutilised 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 immediately to Unclaimed Funds
Trust Fund.
But shareholders and other stakeholders in the financial sector
had faulted the proposal. As part of efforts to stop the federal
government from taking over the funds, PWSA instituted a case
against the government at the Federal High Court in Abeokuta.
The shareholders (Applicants) sued the Attorney General of the
Federation; Minister of Finance, Budget and National Planning; and
Accountant General of the Federation as Respondents and
Representatives of the Federal Government of Nigeria in the Suit
NO. FHC/AB/FHR/14/2021. The applicants sought an order restraining
the respondents from calling for or transferring the unclaimed
dividends of the applicants from their respective companies to the
Unclaimed Funds Trust Fund in accordance with Part xv of the
Finance Act, 2020.
Hon. Justice J. O. Abdulmalik last Friday, July 23, granted
interim orders restraining the respondents from bringing into force
the “proposed new rules on unclaimed dividends (E-dividend mandate)
or any new rules on unclaimed dividend not in force before 31st
December, 2020.”
The court also restrained the federal government from harassing,
intimidating, inviting and/or ordering public limited liability
companies or their Registrars for questioning for purpose of taking
or giving accounts of the unclaimed dividends, pending the
determination of the Motion on Notice.
A copy of the judgment showed that the case was adjourned to
October 25 for hearing of the applications as well as the
substantive matter.
The chairman of PWSA, Mr. Simon Emokeraro, said the shareholders
were seeking “an Order of the Honourable Court for the enforcement
of the applicants’ fundamental rights to acquire and own immoveable
and moveable personal property; 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; an order
restraining the Respondents from harassing, intimidating, inviting
the companies or their Registrars for the purpose of transferring
the unclaimed dividends belonging to the applicants to the
Unclaimed Funds Trust Fund contrary to the Constitution of the
Federal Republic of Nigeria 1999 (as amended), the African Charter
on Human and People’s Rights Act, Laws of the Federation.
“Others are: an order of the Honourable Court restraining the
Respondents from borrowing the unclaimed dividends belonging to the
applicants; a declaration by the Honourable Court that the
applicants have rights guaranteed and protected under sections 43 &
44 of the Constitution of the Federal Republic of Nigeria, Articles
14 and 24 of the African Charter on Human and People’s Rights and
Article 17 of the United Nation’s Charter on Human Rights 1945 and
sections 42 (1) and (2) of the Companies and Allied Matters Act; a
declaration of the Honourable Court that Part XV of the Finance Act
2020 calling for or transferring the unclaimed dividends of the
applicants in public quoted companies to 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 Honourable
Court that the applicants are entitled to claim their dividends
without coercion, stampede, and intimidation from the
respondents.”