Investors forget N100bn in unclaimed dividend portfolio as at September

Investors who own shares in the Nigerian capital market have piled up unclaimed dividend warrants amounting to N100 billion as at September 2018, according to the market regulator, the Securities and Exchange Commission (SEC).

Mary Uduk, SEC’s acting director general who made the disclosure also said the size of unclaimed dividends fell by N10 billion in the current year.

She stated these in a recent television interview while offering explanations on some developments in the nation’s capital market.

On the efforts of her commission to significantly reduce the massive amount involved, she said they came up with the e-dividend mandate management system which allows investors accounts to be credited immediately they are mandated with the registrars and the relevant banks.

“Within 24 hours your dividend hits your account and even the back log that were not paid for years also hits the account.

“You also must have heard of our multiple subscription initiative which we have extended for another one year because we want investors that subscribed to shares in multiple names to regularize their accounts. Many of them do not even remember the names with which they bought the shares and this increases the quantum of unclaimed dividends in the market. That is why we are engaging with the receiving agents to check into their records and see how this can be reduced and the owners can claim their dividends”, she said.

She appealed to investors to take advantage of the ongoing e-dividend registration so as to reduce the unclaimed dividends profile as well as increase liquidity in the capital market and the economy.

Uduk also said SEC was currently leading the entire capital market industry in an effort to migrate all shareholders to an e–dividend regime.

“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”, she said..

The previous paper dividend warrant regime has limitations such as ostal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, amongst others.

The e–dividend regime bypasses these limitations by ensuring that dividends which do not exceed 12 years of issue are credited directly to an investors account after declaration by the paying company and within a stipulated payment period through simple interbank transfer.