SEBI asks cos to declare dividend on a per share basis

(25/4/2009 - Indian Market Updates)  - SEBI on Friday reduced the timelines for the notice period by listed companies for all corporate actions like dividend and bonus, to name

a few. The notice period for the record date has been brought down to seven working days while that for board meetings has been reduced to two working days. It has also introduced a uniform procedure for companies in dealing with unclaimed shares. The new clause relates to those shares that could not be allotted to the rightful shareholder due to insufficient information.

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“It has been brought to the notice of the board that there is a large quantum of shares issued pursuant to the public issues, which remain unclaimed despite the best efforts of the registrar to issue or issuers, and that there is no uniform practice for dealing with such shares,” the release said.

The unclaimed shares will be credited to a demat suspense account opened by the issuer with one of the depository participants and any corporate benefit, such as dividend, bonus shares, will also be credited to such account. The allottee’s account will be credited as when he/she approaches the issuer, after undertaking the proper verification of identity. The voting rights of these shares will remain frozen till the rightful owner claims the shares. The details of the shares in the suspense account will be disclosed in the annual report.

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In order to bring about uniformity in the manner of declaring dividend among listed companies, Sebi has made it mandatory for companies to declare their dividend on a per share basis only. This means that irrespective of the face value of the share, the company will have to mention the dividend on an absolute basis.

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source - www.economictimes.com