The problem of unclaimed dividends in listed African companies is widespread. Take MultiChoice, which is still looking to pay out about R147 million in unclaimed dividends (article below).

Or Dangote Cement which had over 260,000 unclaimed dividend payments in August 2021.

Or the 3,500 TNM Malawi shareholders who have not claimed their dividends. That’s one in four shareholders in TNM who have not received their payments.

Not ensuring that dividends reach investors is a failure of investor relations.

Regulators enable “empowerment” of the retail investor through a low investment value threshold – so all can “participate and be empowered”. The opposite happens. Values of investments are too low so retail investors aren’t motivated to pay attention to their investment.

Listed company executives typically view retail shareholders as irrelevant and irritating.

Because of this, ‘lost’ shareholders are more common than you think in our markets.

Unclaimed dividends are costly to listed companies and rob shareholders of value (particularly in high inflation economies).

Unclaimed dividends also disempower investors of their inheritance: the cost of registering a deceased estate when a retail investor dies is typically far more than the value of the unclaimed dividends. And unclaimed dividends cannot be claimed unless a deceased estate is finalised. Most families don’t know or cannot easily identify whether a family member is a shareholder.

By law shareholder details have to remain in shareholder registers for years, up to 11 in some cases. If registrars charge per shareholder per month, companies spend extra money unnecessarily.

Organisations disconnected with their shareholders have to continuously advertise in expensive newspapers and post embarrassing notices on stock exchange websites.

Key elements of avoiding unclaimed dividends are:

• Being directly connected at the point that investors become investors, and at the point they cease to be shareholders
• Constant visibility with investors (serve as reminders) across multiple digital channels
• Defined programmes of investor outreach – being seen to be proactive in looking for shareholders who haven’t claimed dividends is an opportunity to showcase brand and corporate reputation
• Lobbying stock exchanges to significantly increase minimum trading lots with collaboration between listed companies to present a united face
• Prioritising ease of access to information on unclaimed dividends
• Holding share registrars to service level agreements on the rate of direct connection to investors
• Consistently and persistently following up unclaimed dividends
• Appointing dynamic good looking online investor relations consultants

The decision to pursue a retail investor strategy and a broader presence online in investor relations is a strategic communications governance pillar relating to and enhancing overall brand reputation.

Ensuring visibility across multiple digital channels using social media, including email and a mobile investor relations app, is an efficient way to connect with investors in a timely manner, but should be carried out holistically with other initiatives.

Engaging with an online community is important – much useful feedback and insight can be drawn from digital investor interactions (not least of which is updated investor contact information).

Employing all the above ticks most of the boxes of responsible ESG stakeholder communications.

If you are an executive of a listed company please take our 2 minute survey about challenges listed companies face with unclaimed dividends.

Rob

MultiChoice has about R147 million in unclaimed dividends. Find out if you’re owed anything

• MultiChoice says it’s still looking to pay out about R147 million in unclaimed Phuthuma Nathi dividends.
• In February 2021, it said R207 million in unclaimed dividends was owed to 22,000 of its 80,000 shareholders.
• Vodacom said a few weeks ago that it was trying to pay out R61.1 million in unclaimed dividends from its YeboYethu scheme.

MultiChoice says it’s still looking to pay out about R147 million in unclaimed Phuthuma Nathi dividends.

The pay TV broadcaster is making a renewed call to the public, after making one earlier this year, to find out if they, or any one they know, are owed any money because of their participation in the empowerment Phuthuma Nathi scheme.

In February 2021, it said R207 million in unclaimed dividends was owed to 22,000 of its 80,000 shareholders. Since then, it has managed to pay out about R60 million to 4,400 shareholders.

Phuthuma Nathi chairman Mandla Langa said at the time:

“This money belongs to our shareholders. We’re calling on them to contact us to get their money. In these tough economic times we want to do everything in our power to give them what is rightfully theirs.”

Though Putumayo Nathi has been paying dividends every year since the start of the scheme in 2006, a change in contact information or banking details has led to some shareholders not receiving their payments. In some cases, shareholders have passed on and not told their families they owned shares in the scheme.

MultiChoice is not the only corporation trying to find shareholders it owes money to. Vodacom said a few weeks ago that it was trying to pay out R61.1 million in unclaimed dividends from its YeboYethu scheme.

Though MultiChoice and Vodacom still have larger amounts waiting to be paid out, Sasol’s Khanyisa empowerment scheme has made strides when it came to paying out its unclaimed dividends. As of the end of October 2021, Sasol Khanyisa only had R7,3 million in unclaimed dividends.

The amounts owed to specific shareholders are not trivial amounts.

“One shareholder is owed an amount of R408,764.96 and Sasol is engaging with this shareholder to obtain FICA documentation,” Sasol said in a statement.

Those looking to find out if they are owed anything by Phuthuma Nathi, can contact its call centre on 086 011 6226 or by visiting its website at www.phuthumanathi.co.za for information which includes the steps on how to make claims.

“MultiChoice has about R147 million in unclaimed dividends. Find out if you’re owed anything” by Larry Claasen, Business Insider South Africa is licensed under CC BY-NC-ND 4.0

Sign up to The Digital Governance Newsletter and the AfricanFinancials Investor Relations Insights LinkedIn page to receive practical, actionable insights to elevate your online investor relations and communications governance.