Not updating information accounted for unclaimed dividends
The Royal Securities Exchange of Bhutan (RSEBL) has found a total of around Nu 80mn unclaimed dividends with the 19 listed companies since 1993.
This is because the accounts holders do not update information with the banks and this has accounted for more unclaimed dividends.
The chief executive officer (CEO) of RSEBL, Dorji Phuntsho said that there would be no transaction in respect of any account if the information was not updated. “Not updating the information has accounted for accumulation of unclaimed dividends,” he said.
He said that the shareholders have less knowledge of the stock exchange and are ignorantly not a huge investment.
However, the citizenship identity card (CID) was the key identification number of the shareholders. With changes in CID card numbers and addresses in the year 2000, customers fail to update with banks.
According to the CEO of RSEBL, Dorji Phuntsho, there was no digital transaction in the country in the past and this absence of a robust system had led to unclaimed dividends since 1993.
“Lacking data policy in the country, companies couldn’t harmonize the system. The change of CID card numbers and the change of account numbers with the banks also contributed to the accumulation,” he said.
Meanwhile, from the 19 listed companies with the RSEB, 16 companies have recorded unclaimed dividends.
Of the total unclaimed amount of Nu 797,719, Druk Punjab National Bank (DPNB) has recorded the highest unclaimed dividends of more than Nu 12mn followed by Bhutan Insurance Limited having more than Nu 11mn and Tashi Bank with more than Nu 5mn.
With only Nu 84,390, GIC Bhutan Reinsurance Company. Ltd has the lowest unclaimed dividends while Druk Wang Alloys Ltd has the second lowest having Nu 2,18,714.
The company secretary of DPNB, Kesang Pem said the clients are unaware of the stock exchange market which leads to the accumulation of unclaimed dividends.
“With changes in the CID number and shareholders do not update their information with the bank,” she said.
“Though shares holders in remote places can be considered to have been left out lacking access to information,” she said adding that even the educated citizens in urban areas also did not claim the dividends despite it being announced publicly every time dividends are declared.
She said that the bank has been trying to inform the public through calls and informing through different media platforms.
She added that the DPNB has about 22,000 shareholders and declared dividends in the financial years 2013-2014. The bank declared bonus shares in 2015 and auctioned right shares in 2018.
However, of the 19 listed companies, only two companies declared dividends for the year 2020, and five companies declared dividends for last year.
The CEO of RSEBL, Dorji Phuntsho described the issue of unclaimed dividends as a legacy issue as they happened way back in the past and it happens globally, adding that right now, the major problem had to do with identity management which the capital market and other stakeholders were working to resolve.
He said that the RSEBL is cleaning the data daily and is working with capital market operators to resolve all such issues and shareholders to update their information.
“Like in other countries, there is a need for the legal framework for the unclaimed dividends,” he added.
Sangay Rabten from Thimphu