Tens of thousands missing out on Vodafone dividends
TENS of thousands of Irish shareholders are not receiving dividend payments from Vodafone because they didn't return a form with their bank details, the mobile phone company said yesterday.
The shareholders have lost out since Vodafone became the first British company last year to require that people have dividend payments paid directly into their bank accounts, rather than by cheque.
About 70,000 shareholders worldwide have failed to sign up for the payments but the majority of these are Irish, spokeswoman Christine Heffernan said.
Vodafone has around 500,000 shareholders but up to 400,000 of these live in Ireland. They became part-owners in the company by accident after Vodafone snapped up Eircell, the mobile unit of Eircom, which had been privatised in 1999.
Vodafone contacted shareholders on four occasions in 2009 and this year to advise that they needed to provide details of their bank accounts.
The dividends not paid to shareholders are being kept in a special account, where they do not earn interest. Vodafone estimates that it has 50,000 "disengaged shareholders", who do not respond to letters and do not cash dividend cheques.
"The overwhelming majority of shareholders provided their details and have received two dividend payments in 2010," Ms Heffernan said yesterday.
She did not place a value on the missing dividends or specify the number of Irish shareholders not getting payments.
The mobile phone giant says the new payment method, which is common in Australia, saves money and is good for the environment. The decision has saved the equivalent of 60,000 litres of petrol a year, it calculates.
The company introduced electronic payments because the Irish Government charges a 50c tax on each dividend cheque sent to shareholders. This is known as medallion stamp duty.
Vodafone sent out up to 600,000 cheques a year to Irish shareholders, which means the company is saving as much as €300,000 a year on taxes alone by using electronic payments.
Shareholders were told about the decision in August and again in December, when they received letters designed to look like the final reminder from a utility company.
Shareholders who have not provided their direct credit details receive a tax voucher advising of the amount of the dividend payment and that it is being held in a non-interest bearing account.
Anybody who wants to provide payment details should ring 0818300999 or log on to www.investorcentre.co.uk.