Connect with us

Business News

Nigeria to Borrow Unclaimed Dividends, Dormant Accounts’ Balance

Published

on

Nigeria government has perfected ways to borrow funds from unclaimed dividends and dormant bank account balances unattended to for at least six years, despite the opposition from stakeholders, thanks to the 2020 Finance Act.

With the recent law coming into force, which authorize the federal government to borrow from the two sources, proceeds from the two sources will stand as special credit to the federal government through the Unclaimed Funds Trust Fund contained in the Finance Act 2020, recently signed into law by President Muhammadu Buhari.

“Any unclaimed dividend of a public limited liability company quoted on the Nigerian Stock Exchange 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 the trust fund.”

The law provides that, the monies transferred to the trust fund will be a “special debt owed by the federal government to shareholders and dormant bank account holders.”

According to the law, however, exempts official bank accounts owned by the federal government, state governments or local governments or any of their ministries, departments or agencies.

The operation of the trust fund will be supervised by the Debt Management Office (DMO) and governed by a governing council chaired by the finance minister and a co-chairperson from the private sector appointed by the president.

Other members of the governing council shall include the governor of the Central Bank of Nigeria (CBN), director-general of the Securities and Exchange Commission (SEC), managing director of the National Deposit Insurance Corporation (NDIC), a representative of the registrars of companies, two representatives of the shareholders’ association, a representative of the Bankers’ Committee with the director-general of the Debt Management Office functioning as the secretary of the trust fund.

The law provides that the original owners of the money can claim it at any time, but many shareholders and other members of the capital market community had opposed the provisions of the law, saying the government lacks powers to manage funds belonging to private sector investors.

“Dividends are private wealth of investors, either individuals or corporate entities. The idea of converting such private wealth to federal wealth negates the relevant provisions of the rights to own property as guaranteed by the 1999 Constitution. Our opinion is that S39 to the extent of its inconsistency with S44 of the 1999 Constitution (as amended) is null and void. The law expressly states that there shall be no forceful takeover of any private movable property of any Nigerian without due and appropriate compensation and or valid court order,” shareholders under the aegis of Independent Shareholders Association of Nigeria (ISAN) had said.

According to them, dividends are only available to investors after “the company has paid a host of taxies, including companies’ income Tax Act (CITA), Educational Trust Fund(ETF) and other taxes are paid to the federal government, including 10 per cent withholding tax on the shareholders for every dividend declared.”

“The statute of limitation provides for expiration of debts after six years. CAMA 2020 by S432 increased the limitation to 12 years. Is government by any chance taking the position that the statute of limitation is unconstitutional?

Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Chief Onyenwechukwu Ezeagu, also said the federal government taking over the management of unclaimed dividends was unnecessary because capital market regulators and operators had leveraged technology to put in place initiatives that are already addressing the issue.

“Generally, the incentives for savers and capital providers in the capital market is the expectation of dividends and capital appreciation. It is therefore our considered view that the proposed legislation, if passed, will be a great disincentive to savings, long-term capital mobilisation and serious disruption of the Nigerian economy since it will take away the only expectation of investors in the market,” Ezeagu said.

Join our newsletter


Continue Reading
Click to comment

Leave a Reply

Business News

Bahrain’s Bank ABC Acquires 99.4% Stake in Blom Bank Egypt

Published

on

Bahrain-based Arab Banking Corporation (Bank ABC) has entered into an agreement with Blom Bank, Lebanon to acquire its 99.4% stake of Blom Bank Egypt for $427 million.

Bank ABC, a leading financial institution in the Middle East, is expected to to complete the acquisition in the second quarter (Q2) of 2021.

The acquisition is subject to regulations in Bahrain, Egypt and Lebanon.

A statement from Bank ABC said the acquisition is expected to “reposition Bank ABC’s Egyptian franchise amongst the top 20 banks in Egypt, delivering significantly greater scale and a more efficient platform; provide the Bank ABC Group with a highly profitable franchise with significant future growth potential in one of the most fundamentally attractive markets in Mena; build new capabilities, particularly in Retail, Corporate and SME lending leveraging Bank ABC’s strong digital and mobile banking capabilities and its Group centres of excellence; provide customers with an enhanced product offering, with a more capable and expansive branch network through the addition of 41 branches; and help facilitate greater international connectivity for the enhanced customer base and a stronger platform for access to Egypt for Bank ABC’s broader client base.”

HSBC Bank Middle East is acting as the sole financial advisor to Bank ABC, with Freshfields Bruckhaus Deringer and Zulficar & Partners acting as legal advisors. Blom Bank Lebanon was advised by CI Capital, while Baker McKenzie acted as legal counsel.

Dr Khaled Kawan, Group CEO of Bank ABC said “the acquisition of Blom Bank Egypt is a unique opportunity for Bank ABC to fulfil its longstanding strategic commitment to inorganically expand its core business, giving us a significantly enhanced platform for future growth, in one of the most attractive markets in the region.

“We have an active relationship with our regulators and will be working to secure their approvals to complete the deal as swiftly as possible. We will then look forward to working with our new Blom Bank Egypt team to combine Bank ABC Egypt and Blom Bank Egypt thereby creating a new powerhouse in the Egyptian banking sector. We also thank the management teams of Blom Bank Lebanon, Blom Bank Egypt and their advisors for the seamless execution process that has led to this agreement.”

Saad Azhari, Chairman and General Manager of Blom Bank Lebanon, commented: “This transaction demonstrates our continuous commitment to our stakeholders and dedication to our strategy. It will allow Blom Bank Lebanon to comply with the latest regulations issued by the Central Bank of Lebanon, which stipulate that all Lebanese banks must increase their equity by 20%.”

“I would like to take this opportunity to thank our team in Blom Bank Egypt for their dedication and perseverance that have made our operation in Egypt successful. I would also like to thank the management and transaction team at Bank ABC for their cooperation and professionalism during the entire transaction process as well as the CI Capital Investment Banking and Baker McKenzie teams for their commitment and dynamism,” he added.

Join our newsletter


Continue Reading

Business News

Ten African Presidents Receive AfCFTA Awards

Published

on

Nigeria’s President Muhammadu Buhari and nine other African Presidents have received awards for their contributions to the kick-off of the African Continental Free Trade Agreement (AfCFTA).

Dr Akinwumi Adesina, the President of African Development Bank (AfDB), and some heads of institutions also received awards for their roles in the enforcement of the AfCFTA.

The award ceremony was organised virtually by the African Union (AU) with the private sector in the AU headquarters at Addis Ababa, Ethiopia.

The presidents given the awards were Muhammadu Buhari of Nigeria; Akufo-Addo of Ghana; Felix Tshekedi of Congo; Ahmed Fattah Al-Sisi of Egypt; Mahamadou Issoufou of Niger; Alpha Conde of Guinea; Cyril Ramaphosa of South Africa and Chairperson of the AU; and Paul Kagame of Rwanda.

Others are King Mswati III, Ngwenyama of Eswatini; Prime Minister Abiy Ahmed of Ethiopia; two former heads of states – Hailemariam Desalegn, former Prime Minister of Ethiopia and Mr Olusegun Obasanjo, former President of Nigeria.

The President, Africa Business Council (AfBC), Amany Asfour, was also presented with an award for her role in that respect.

Some heads of African institutions and other prominent individuals were also awarded for their exceptional contributions to the AfCFTA process.

The awards were received by the various countries’ ambassadors and representatives of institutions present while those absent will receive through courier services to the recipients.

One of the award recipients, Amany Asfour said the ceremony showed the commitment of the private sector towards the implementation of the AU Agenda 2063.

“We need an architecture where the organised private sector would cater for the implementation of the AfCFTA and it is such a pleasure now it has been constituted by the efforts of the AU Commission,” she said.

Asfour urged the players in the private sector to ensure the implementation of policies regarding the agreement.

“We need the legislation that will make it happen with the AfCFTA, the policies can be on paper but the implementation is our role as the private sector.

“It is a must to empower our Small and Medium Enterprises, youths and women. We are the richest continent in the world but we need to manage our own resources,” she said.

In her remarks, Saratu Aliyu, President, Federation of West Africa Chambers of Commerce, Industries, Mines and Agriculture (FEWACCI) apd governments, private sector players and contributors to the success of the AfCFTA implementation.

Aliyu expressed optimism that the agreement would promote e-commerce and e-business infrastructure and develop a roadmap for the development of a digital economy to support the growth in member states.

She also reiterated the support of FEWACCI to achieving economic development and growth in Africa.

Join our newsletter


Continue Reading

West Africa Business News

Nigerian Billionaire to Invest N3bn in Fidelity Bank

Published

on

U.S.-based Nigerian billionaire, Dr Oluleye Adigun has disclosed ongoing efforts to invest N3Bn ($6.8million) in Fidelity Bank through shares acquisition.

Dr Adigun, in a recent interview, said the acquisition is part of his planned investment in the Nigerian economy, adding that the process of buying Fidelity bank was almost done, attributing the little delay to the COVID-19 pandemic.

“The Fidelity bank purchase is almost done. COVID-19 delayed the process a little due to everything closing down, but the process just picked up again. I was told I have to open a bank account and will need BVN. I am planning to come to Nigeria to do that as soon as possible.

The Osun State-born billionaire is the owner and Chief Operating Officer of Golden Glades Treatment Centre as well as Adigun Investment Group with stakes in nine companies operating in commercial real estate, several e-commerce companies. as well as wind and solar energy.

Others are aviation, with four private planes, a technology company, which owns computer software/applications, and six clinics in the healthcare industry.

Peter Aletor, Managing Director for Apel Asset Limited, and a friend, Mr Tosin Afolabi, have been very helpful on it. Afolabi will be partner in my bank venture in Nigeria with small share,” he said of his foray into the Nigerian economy.

Adigun expressed willingness to bring his airline company, healthcare, technology as well as solar and wind energy to Nigeria in the future.

“I am interested in investing in Nigeria because it’s my father land. I believe there has to be a way of doing something in my own country and be successful in it.

“I have touched almost every industry here in the U.S. and very successful in it. I have done business with people in other countries like South African, Zimbabwe, Jamaica and Europe. I want to do same in my own country,” he said.

He added: “The Nigerian economy has great potentials. Nigeria has everything to be giant in the world. We have the smartest people in Nigeria.

“With the right people, with great mind and good intentions, Nigeria can be like U.S. and other thriving countries. I need to build my own too. Nigeria is my home regardless of what I have here in U.S. .”

He narrated how his previous efforts to purchase failing Polaris Bank in Nigeria was thwarted, on the grounds that he was not known in Nigeria.

“When I decided to start investing in the Nigerian economy, I first heard of Polaris Bank. So I decided to buy a failing bank and Polaris came up through my connections with CBN.

“We are going through with the process of buying into Fidelity Bank now and that should be completely done in a few weeks. This is a billion naira project and hope it goes well. I have built myself from making less than 30,000 dollars yearly to having a net worth of over 100 million dollars within the last four years.

“We are all Nigerians and looking to better our country together. We can’t fix Nigeria if we are all divided. As Nigerians, we need to change our mindset to fix and make Nigeria better together,” he said.

He said he is also in the process of applying for a banking license with CBN to dive into fintech

Adigun is an old student of Olivet Baptist High School in Oyo, Miami Dade college, Florida Atlantic University and Walden University.

He has served in several U.S. organisations as a Police Officer, Substance Abuse Counselor and Clinical Director before he opened his first business in 2017.

Join our newsletter


Continue Reading

Trending