Cheques from foreign companies

Michael_Waterfield

My mother has a small shareholding in a French company. They took over a British company some years ago. They normally send cheques for the dividends made out in pounds sterling but for the latest payment they sent a cheque made out for 31.50 euros.  We took it to her bank (Santander) to pay it to her bank account. They said they could not do this at the branch but we would have to send it to an office in Liverpool, it would take about six weeks to clear and she would be charged ten pounds. I feel sure the cheque was issued incorrectly and we are sending it back to the Company Registrar (in Bristol) for correction. The cheque is drawn on a British Bank (Barclays) at Canary Wharf, London and is marked "Payable only in Great Britain". Is it a mistake or is there a new rule (possibly connected with Brexit) which means that French dividends have to be paid in Euros? Furthermore do all banks have similar procedures to Santander to deal with Euro cheques.If there is no mistake can the charge and inconvenience be avoided by having the dividends paid direct to her account. I am concerned because my mother (and I) have a small shareholding in Santander as many people in Britain will have. 

DullGreyGuy

I'd be highly surprised about a law stating what currency dividends must be payable in but if they are an overseas company then issuing a cheque in any other currency exposes them to FX risk. Sure your individual cheque is relatively small but their overall risk could be massive given the total amount of dividends being distributed and the amount of overseas investors. 

Brie

I had a similar problem when JPMorgan kept sending me dividend cheques for 4 US cents.  I asked to have one in UK pence instead and was told it wasn't possible.  So I repeatedly told them that I hadn't received the cheques and they would reissue them and post them air mail from the US.   Very petty of me but somewhat satisfying.

I suspect in this case the French company doesn't want the cost of the exchange at Barclays.  Is it possible to ask for the money to be paid on to a credit card so the euro amount would be clear and the exchange would be instant on the day of the payment.

MX5huggy

Santander is listed on the London Stock exchange amongst others. 

wmb194

Michael_Waterfield said:

My mother has a small shareholding in a French company. They took over a British company some years ago. They normally send cheques for the dividends made out in pounds sterling but for the latest payment they sent a cheque made out for 31.50 euros.  We took it to her bank (Santander) to pay it to her bank account. They said they could not do this at the branch but we would have to send it to an office in Liverpool, it would take about six weeks to clear and she would be charged ten pounds. I feel sure the cheque was issued incorrectly and we are sending it back to the Company Registrar (in Bristol) for correction. The cheque is drawn on a British Bank (Barclays) at Canary Wharf, London and is marked "Payable only in Great Britain". Is it a mistake or is there a new rule (possibly connected with Brexit) which means that French dividends have to be paid in Euros? Furthermore do all banks have similar procedures to Santander to deal with Euro cheques.If there is no mistake can the charge and inconvenience be avoided by having the dividends paid direct to her account. I am concerned because my mother (and I) have a small shareholding in Santander as many people in Britain will have. 

Look up the annual results or dividend announcement notice from the company and see what it says about its dividend currency election choices - you might find it in an 'investors' section of its website. Many multinational companies will give shareholders the choice of a couple of different currencies and the shareholders' country of domicile shouldn't matter. If available, usually you make this election via the share registrar. 

You could also talk to the registrar about being paid electronically rather than by cheque. In my experience, when the dividend is paid in a foreign currency the registrar will convert it to sterling at a reasonable rate but I've only received them via my stockbrokers rather than directly so YMMV.