Abstract:

Malaysia is going strongly into e-payment mode with even tax payments being encouraged strongly by the government through e-mode. All payments (including petty ones through ticketing and smart cards) have been shifting now to e-mode. It is quite surprising that dividend payments have not been encouraged by the government and the insistence by the tax authorities of slip being needed for acceptance as payments (even for Maybank, who is otherwise paying their dividends through e-mode). This douses the enthusiasm of the players, both Corporates and service providers and individuals. As per Vincent Ugwu, stock broker and CEO of Covia Securities, the customer is frustrated with the manual system that led the Nigerian Stock Exchange to ensure switchover to payments through e-dividends by 31/12/08 (business online.com/investor/262.html). Thailand has the system in place with the participation of Standard Chartered Bank even though the Thai government is not as enterprising in e-mode of payment or in IT and ICT as the Malaysian government (which is poised to be leaders of knowledge economy that is driven by IT). It is, therefore, felt important to determine the reason for this lack of initiative with all the stakeholders and the government and also the effect on the experiences and satisfaction of all the players. It is important also, to note whether there is any deterrent to the policy of dividend declaration, in view of the difficulties encountered in administering with the present system. There are presently sufficient number of companies handling new issues and similarly large number of companies issuing dividends running into millions of ringgits per year and effecting millions of individuals (investors) and hundreds of Corporates. A quick review in the market, further indicated that printouts of dividend cheques do not resemble normal cheques and shareholders mistake it for a statement, confusing the issue. This is compounded by the hassle of going to the bank to deposit the cheque(s) which is now mandatory for getting credit. And in case they shift their residence, they have to forgo this right of dividend as companies have no system of updating addresses, which is a substantial loss of income to investors, whose sole objective had been to increase their earnings through share investments as against bank deposits.