Each January we send a Notice Letter to shareholders whose accounts have been dormant for more than 12 years. The Notice advises the shareholder that their shares are about to be sold and the proceeds of the sale forfeited. Those who receive this letter need to contact our Registrar, Equiniti, urgently on 0345 609 0810.
How do accounts become dormant?
When we mail dividends to shareholders, some of the cheques do not get cashed. This is normally because the shareholder no longer lives at the address we have on the register for them. Once our records show that three consecutive dividends have been sent, and remain uncashed, the shareholder is considered ‘gone away’ from the address on the share register. All mail is then suspended until the shareholder gets in touch with us (this is a security measure).
What happens to the unclaimed dividends?
After a period of 12 years, dividend payments which remain unclaimed are forfeited and return to the Company. Rather than take these funds back as profit, M&S use these funds for good causes.
What happens to the Shares?
Until the date of the Notice, the shares have sit on the register accumulating and forfeiting dividends. We felt this money could be put to better use, however first we put considerable effort into looking for the shareholders.
How have we looked for them?
In 2007 we contracted with a professional asset reunification company (ProSearch) to search for our lost shareholders. We re-launched this search in July 2010, prior to the first forfeiture of shares, and in September 2011 made further efforts to trace those who have lost touch with their shareholding. To date we have successfully returned a substantial amount of shares and dividends.
So what is happening now?
We have installed a process to search for shareholders as they become classed as ‘gone away’ to do all we can for those that forget about their holding.
What are we doing with those we couldn’t find?
If a shareholder has been considered ‘gone away’ for a period of 12 years, their shares are to be forfeited and sold by the Company. The funds from this sale will be used for good causes, in the first instance this will be ensuring the financial stability of the M&S Company Archive. The M&S Company Archive is a partnership between Marks & Spencer and the University of Leeds that will see items from the Company’s archive exhibited to the public for the first time. It includes more than 60,000 items, including clothing, toys, books, homeware and food packaging, many of which have never been seen publicly before.
What if a shareholder (or person entitled to the shares) came forward after the shares have been sold?
Each case would be reviewed by the Company and our Registrar, Equiniti.
Why are we doing this?
We are focusing on shareholders that have not cashed dividends for 12 years. These shareholders have generally forgotten they own the shares or have passed away. Currently these assets represent dormant monies. We want to put this money to good causes. We are using a professional search company to find these shareholders, their dependents, descendants or any other named beneficiary who would be entitled to these shares. It is only when this proves unsuccessful that the shares will be sold.
Are we doing the right thing?
We believe that putting these dormant monies to good causes is the right thing to do. Indeed it mirrors the approach taken by Government to put dormant monies in bank accounts to good causes.
Ultimately shareholders need to keep their contact details up to date. Having dividends paid into their bank account mitigates the risk when they forget to do so. Even if mail is not received, funds appearing on a bank statement can alert the shareholder, relative, financial advisor, carer or executor that the shareholding exists.