Investments: Nestle, Dangote Cement, MTN, others record N20.9bn unclaimed dividends

*Experts opine investors’ multiple securities subscriptions, incorrect data, and lack of sensitisation by market regulators are are fundamental challenges contributing to unclaimed dividend in the Nigerian capital market

Isola Moses | ConsumerConnect

A total of nine quoted companies on the Nigerian Exchange Limited (NGX) reported accumulated N20.9billion outstanding unclaimed amounts as dividends in the 2022 financial year, compared with N20.08 billion recorded in the past financial year.

ConsumerConnect reports unclaimed dividend refers to dividend, which is being paid by the company but the shareholder has not claimed the dividend.

A company pays it as and when demanded by equity investors, and hence, is a liability for the company.

It is recalled the country’s Securities and Exchange Commission (SEC) had introduced the E-Dividend Management Mandate System (e-DMMS),

The nine companies are: Nestle Nigeria Plc, Nigerian Breweries Plc, Seplat Energy Plc, Dangote Cement Plc, MTN Nigeria Communications Plc, Lafarge Africa Plc, BUA Cement plc, Dangote Sugar refinery Plc, and Nascon Allied Industries Plc.

It is also noted that dividends, which remain unclaimed for a period exceeding 12 years from the date of declaration and which are no longer actionable by shareholders in accordance with Section 432 of the Companies and Allied Matters Act (CAMA), 2020, are included in the profits that should be distributed to the other shareholders of the Company.

Nigeria’s SEC 2022 had disclosed that the N170 billion unclaimed dividends was finally remitted to the Unclaimed Dividend Trust Fund (UDTF), which is being managed by the Commission and the Debt Management Office (DMO).

Analysis of the nine companies’ audited results and accounts for the period ended December 31, 2022, revealed that Nestle Nigeria in 2022 reported N7.58billion unclaimed dividend in 2022 from N6.6billion in 2021, while Nigerian Breweries reported N4.8billion unclaimed dividend in 2022 as against N4.6billion in 2021, ThisDay report said.

Dangote Cement announced N4.4 billion unclaimed dividend in 2022 from N4.6 billion in 2021 while Lafarge Africa announced N1.64 billion unclaimed dividend in 2022 from N1.4 billion in 2021.

Also Nascon Allied Industries saw increase in its unclaimed dividend to N695.8 million in 2022 from N658.16 million in 2021.

Other notable companies with unclaimed dividend are: BUA Cement with N689.54 million unclaimed dividend in 2022 from N474.7million in 2021; MTN Nigeria Communication with N632 million unclaimed dividend in 2022 from N688 million; Seplat Energy in 2022 reported N448.55 million unclaimed dividend in 2022 from N939.25 million in 2021 and Dangote Sugar with N39.27 million unclaimed dividend in 2022 from N88.34 million in 2021.

Experts believe multiple securities subscriptions, incorrect data and lack of sensitisation by market regulators are majorly the challenges contributing to unclaimed dividend in the Nigerian capital market.

Efforts in progress to rebuild e-DMMS platform -SEC

Commenting on the idea of unclaimed dividends, Mr. Lamido Yuguda, Director-General of SEC, last year stated that efforts were ongoing to rebuild the e-DMMS platform in a sustained effort to drive down unclaimed dividends in the capital market in the country.

Yuguda said members of the Capital Market Committee had adopted some measures to increase the number of mandated investors on the e-DMMS and reduce the quantum of unclaimed dividends in the market adding that the e-dividend Committee had been working on the platform and have concluded plans to have it rebuilt.

According to him, this involves having a centralised submission of E-dividend mandate forms, Application Programming Interface (API) for Banks and Registrars, and a revamped Web interface among others.

Mr. Tajudeen Olayinka, CEO, Wyoming Capital & Partners, was quoted to have said: “The truth is that some investors are yet to actualise the E-dividend mandate by SEC, and they appear to be in large numbers. Some of them are outside Nigeria, and have been away from the country for quite a long time.

“Some are late, while some others may have reasons for temporarily staying away.”