R22 billion in unclaimed JSE dividends – and how to avoid it

South African companies hold close to R22 billion in unclaimed dividends, some dating back more than 15 years in the case of BEE beneficiaries.

This creates an administrative nightmare to track down shareholders who are owed the money and leaves thousands of South Africans out of pocket.

Speaking to Fifi Peters on SAfm, JSE Investor Services CEO Carol Crozier explained how it got to this point, what happens to the unclaimed sum, and how investors can avoid unclaimed dividends owed to them in future.

Reasons for why there are unclaimed dividends

When dividends are left unclaimed for an extended period, listed companies attempt to contact the shareholder to inform them of the payment.

However, Crozier explained that there are two main challenges companies face when trying to contact the shareholder, which often results in the dividends being left unclaimed:

• Outdated personal details – Decades ago, registering on the stock market didn’t require an ID number. Individuals would register with their names and physical addresses, and as people moved or changed names, they did not keep their details updated, becoming very difficult to find.
• A Death with relatives having no knowledge of the shares – In the event of a shareholder’s death, there are many cases where the relatives of the shareholder do not know about the company shares, leaving the dividends unclaimed as relative information is hard to ascertain.

When the companies fail to reach the shareholder, they then run campaigns via radio, newspaper, and even social media to contact the shareholder.

What happens to the unclaimed dividends

Crozier noted that from a legislation perspective, companies must keep the dividends segregated from the business.

The unclaimed sum is kept by the issuing company or transfer secretaries of those companies on the shareholder’s behalf.

The dividends are readily available, so when the shareholder comes forward to claim the sum, they are immediately available.

However, Crozier also said that over an extended period, there are some cases where companies can file to reclaim the outstanding dividends.

What can you do to ensure your dividends are not left unclaimed

Crozier explained from a JSE investor services perspective, shareholders’ can download the JSE product ShareHub.

 The ShareHub is an electronic platform that offers the following:

• A central point of access for all communication that you would usually receive from JSE.
• A central point to maintain your contact details, making it easier for you to receive communication about your shares.
• ShareHub has a message box, allowing for online filing and storage of all important shareholder communication distributed via the platform.

This app regularly encourages shareholders to keep their details up to date and ensures the shareholder is contactable.