Praise for budget proposal on dividend payout - Letter

As a crusader for minority shareholder rights and also as their main spokesman at almost all annual general meetings of public quoted companies, I fully endorse Charitha P. de Silva’s note in The Sunday Times FT of December 24 where he supports the recent budget proposals that a tax of 15% should be levied on the difference between the actual dividend paid and one third of the distributable profits after deducting capital expenditure, if the dividend payment is loss than 25%.

In fact, this is what minority shareholders have been agitating for at AGMs all these years. Instances are several where the bulk of the distributable profits are retained under the guise of ‘Reserves’ thus depriving shareholders, in particular the minority shareholders, of a fair and reasonable return on their hard earned investments in public quoted companies.
It remains to be seen however as to whether companies will conform or undergo the tax surcharge.

M. Mohamed Mohideen
Colombo