SECP facilitates shareholders

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To facilitate the shareholders of the companies and to encourage payment of dividend through direct credit in the shareholders’ bank accounts, the SECP has introduced certain amendments to the existing Form of the “Transfer Deed”.
It has been observed that shareholders of companies are facing various problems with respect to receipt of cash dividend through dividend warrants. These problems include misplacement of dividend warrants, delay in encashment of dividend warrants, fraudulent encashment of dividend warrants, delays/loss of dividend warrants in postal service etc.
Further, the unclaimed dividend has also been piling up on the books of listed companies. A study conducted on 10 blue chip companies shows that an amount of more than Rs4 billion stood as unclaimed dividend in their books for the year 2011.
The above referred amendments in the transfer deed and issuance of directives by the SECP regarding payment of dividend through prompt credit in the shareholders’ bank accounts will not only bring efficiency and hassle-free environment, but will also eliminate malpractices such as fraudulent encashment of dividend warrants, delays/loss of dividend warrants in postal service and minimizes the issuance of duplicate dividend warrants. This will also improve the unclaimed dividend position in the books of companies.
The SECP has thus provided a mechanism whereby all prospective shareholders by filling in the dividend mandate portion of the transfer will get their dividend direct in to their bank account.