Acting Director-General of Nigeria’s Securities & Exchange Commission (SEC), Ms. Mary Uduk, on Monday in Abuja said shareholders have so far received N9bn in unclaimed dividend between January and September 2018.
Ms. Uduk, who was speaking at a world press conference addressed by Minister of Finance, Mrs. Zainab Ahmed, while not saying categorically how much is the value of dividend still considered as unclaimed in the coffers of company registrars, so far, however urged “Nigerians to regularise their multiple accounts as this well help reduce unclaimed dividends as well as increase liquidity in the market.”
The last official figure of the unclaimed dividend mountain, which has continued to pile amidst claims that company registrars are frustrating all efforts to reduce the value, which was given mid-July at a town-hall meeting Port Harcourt, the Rivers State capital, was N129.62bn. This was considered its highest level, three years since the launch of the e-Dividend Mandate Management System (E-DMMS) by the SEC in November 2015.
A dividend is the portion of a company’s profit set aside for distribution by the board at the end of a particular period- whether at the company’s year-end (full-year), or as has become common today- interim (at the end, oftentimes- second quarter). The portion of profit (dividend) so set aside is paid into the account of the company registrar for distribution per unit of the company held into shareholders bank accounts (e-Dividend payment portal).
The e-DMMS is an E-dividend payment portal expected to eradicate or reduce to the barest minimum the incidence of unclaimed dividend, by ensuring payment of dividends directly into a shareholder’s account was in collaboration with the Central Bank of Nigeria (CBN), Nigerian Interbank Settlement System (NIBSS), among others.
The SEC has repeatedly urged all stakeholders to tackle the unclaimed dividend menace headlong, given the fact that it starves the economy of funds.
Uduk had at the Port Harcourt meeting described “unclaimed dividend (as) an undesirable feature of the Nigerian capital market which denies investors/shareholders the gains of participating in the capital market.
“It denies the economy access to the huge amount of money which should have accrued to shareholders and would have gone into circulation to oil the wheel of the economy.
“It is a consequence of the bottlenecks which are inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, amongst others.”
Also speaking at the ministerial briefing, Uduk urged “Nigerians to regularise their multiple accounts as this will help reduce unclaimed dividends as well as increase liquidity in the market.”
Continuing, she assured that the commission is “going digital in the capital market to reduce transaction cost and attract more investors.”
Also, in a statement on Sunday, December 23, 2018, the SEC urged those with multiple shareholder subscription accounts begin the process of regularising such, so as to obtain the benefits of their investments in the capital market.
The statement quoted Ms. Uduk, as reassuring during an interview in Abuja at the weekend that such subscribers will not be prosecuted, saying “the forbearance window for shareholders with multiple subscriptions has been extended by another year from the December 31, 2018 deadline previously communicated. Consequently, we enjoin those who have not come forward for the regularization of shares purchased with multiple identities, to do so.”
The SEC, she continued, is only interested in ensuring investors have the benefits of their investments.
“We just want them to come forward and take back their shares and register them properly with CSCS (Central Securities Clearing System) so that the trading float in the market will increase.”
She also enjoined investors to take advantage of the on-going e-dividend (electronic dividend) registration to reduce the unclaimed dividends profile as well as increase liquidity in the capital market and the economy.
According to her, “the essence of the E-Dividend Mandate Management System is to eradicate or reduce to the barest minimum the incidence of unclaimed dividend. Unclaimed dividend is an undesirable feature of the Nigerian capital market which denies investors/shareholders the gains of participating in the capital market. It denies the economy access to the huge amount of money which should have accrued to shareholders and would have gone into circulation to oil the wheel of the economy.