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Dividend Payments: SEC warns listed firms, registrars against Capital market infractions

*Nigeria’s Securities and Exchange Commission vows to not hesitate in sanctioning any erring Capital market operators in relation to misappropriating unclaimed dividends, or any other issue to boost investor confidence

Emmanuel Akosile | ConsumerConnect

The Securities and Exchange Commission (SEC), in Nigeria, has stated that its attention has been drawn to the fact that some quoted companies on the Nigerian Exchange (NGX) Limited and Company Registrars are engaging in selective payments and distribution of dividends to investors.

ConsumerConnect learnt the capital market regulatory Commission, accordingly, warned listed firms and Capital market registrars to desist from such a practice.

Mr. Lamido Yuguda, Director-General of SEC, said this at the weekend at the Institute of Capital Market Registrars’ (ICMR) 10th Annual Conference, Investiture of Fellows, Induction of Associates and Annual General Meeting (AGM), in Lagos.

The SEC Director-General, in his keynote address titled, “Reinventing The Nigerian Capital Market For Growth: The Digital Technology Approach”, on the occasion, noted that the attention of the regulator had been drawn to the fact that some companies and registrars perpetrate these infractions in the equity market in the country, agency report said.

Yuguda also said that some were unwilling to release the unclaimed dividends in their custody and employed several antics to frustrate shareholders from enjoying the benefits of the E-DMMS platform.

The Commission will not hesitate to sanction any erring operators in relation to unclaimed dividends or any other issue.

He further noted: “We, therefore, urge the ICMR to encourage its members to uphold the Code of Ethics of the profession and as contained in the Rules and regulations of the commission.”

Yuguda also lamented that the number of mandated accounts had been on the decline for some time.

“Regrettably, the number of mandated accounts has been on the decline for some time, and the rate at which investors are coming forward to conduct their KYC has not been encouraging.

“I urge the ICMR and its members to do their best to address some of these challenges,” Yuguda added.

He also stated that operators have a duty to uphold the integrity of the capital market to foster investor confidence.

Investors are greatest assets in Capital market, says Yuguda

Investors are the greatest assets in the capital market, said he.

Yuguda urged the ICMR and SEC to work together and leverage the opportunities that digital technology provides.

According to him, this measure will help to resolve the lingering issues surrounding unclaimed dividends in the Nigerian capital market.

He assured stakeholders that SEC would continue to engage with all stakeholders on new developments in the digital technology space in the country.

The SEC Director-General added: “I believe that we all have a common interest in seeing these opportunities harvested, but also in mitigating the risks so that we all can reap the benefits.

“As you are aware, the SEC has committed resources to put in place several measures to address the issues of unclaimed dividend.

“Despite this commitment of resources, the issues still linger.”

SEC’s 3-pronged regulatory approach

Mr. Yuguda further noted that the regulatory Commission has adopted a three-pronged approach to regulating digital innovation, including safety, market deepening, and provision of solution to problems.

In his address at the event, Mr. John Obaro, Managing Director/Chief Executive Officer (CEO) of SystemSpecs Limited, also spoke on exploring digital  innovations to solve the issue of unclaimed dividends in Nigeria.

Obaro stated that technology could be used to open up new ways of operations, drive productivity, increase collaboration and partnership, among others.

In order to bring a lasting solution to the unclaimed dividends conundrum, Obaro said that legislations and guidelines should be looked into, as current laws cannot motivate the industry players to aggressively seek a resolution.

According to him, laws should be enacted and guidelines issued that move the consumers to the centre of the benefits of investments, while also noting that there should be automation of a properly integrated system in the country.

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