By Sanette Viljoen
It often happens that a person or a family bought shares many years ago but has lost the relevant share certificate in the meantime. He or she now wants to trace those shares or find out what they are worth.
When the share certificate is lost and you know with which company it is, the transfer offices should be the first points of enquiry. South Africa has two transfer offices where enquiries can be made, viz. Computer Share Investor Services and Link Market Services.
In the world of paper years ago registrations were made without ID numbers and it will therefore be of no use to provide your ID number. However, if the companies are not very old the administrative offices will be able to trace it through an ID number.
If the company is known
When the shareholder receives confirmation that the company does exist or that there are funds to which the client is entitled, the shareholder has two options.
Firstly, the client can work through his broker to have the share certificate replaced if the company still exists. Secondly an attempt could be made directly through the transfer office handling the company’s administration to find out what the situation is.
This is a very long and expensive process. The shareholder will have to complete indemnity forms and take out insurance. This insurance is calculated at 2,5% of the value of the shares on the day on which the insurance company receives them. It could therefore come to a stiff amount and everything has to be paid for before the process will be taken further. There will also be administrative costs on the part of the broker, which varies from broker to broker.
After the insurance has been paid, the application is sent back to the transfer office, where permission will be given for new share certificates to be issued.
In some cases where no insurance is payable and the company’s board has to decide on the replacement of the share certificate, it could take much longer than six months.
Whether the process will be worth its while, will depend on the value of the shares. If the value is low, the person should rather negotiate with Computer Share and Link Market to waive payment for insurance.
If there were any corporate actions, such as dividends, name changes, etc., it could happen that the shareholder will not get back the same number of shares that he paid for. It could also happen that there are no longer any shares but only cash (because the company no longer exists). The original company could also have been involved in company mergers so that there will be more companies than when the original shares were bought.
If the shares have a very low value, they are often donated to Strate Charity Fund. Strate Charity Shares (SCS) is a welfare donation plan that uses the funds from donated shares, unclaimed dividends and shares to make donations to a wide range of welfare organisations.