Nigeria's Security and Exchange Commission (SEC) Towers, in Abuja, FCT

Nigerian Capital market records N158.44bn investors’ unclaimed dividends

*A large number of unclaimed shares responsible for unclaimed dividends ─Market Regulator SEC

Alexander Davis | ConsumerConnect

Amid the relatively bearish run in the country’s bourse as economic activities gain momentum, following further ease of months of Coronavirus lockdowns, the investors’ total unclaimed dividends in the Nigerian capital market has been estimated at N158.44billion as of December 2019.

The Securities and Exchange Commission (SEC) data obtained by the News Agency of Nigeria indicated that the figure is still on the increase in spite of e-dividend registration introduced by SEC in 2015.

Dividend is the distribution of a portion of the company’s earnings, decided and managed by the company’s board of directors, and paid to a class of its shareholders.

An unclaimed dividend is recorded when a shareholder fails to claim an already paid dividend after six months.

Agency report stated that breakdown of the components showed that unclaimed dividends with companies (15 months and above) stood at N119.01 billion.

The ones with registrars amounted to N14.64 billion while unclaimed dividends less than 15 months old stood at N24.77 billion.

On the development, Mr. Okey Umeano, SEC Head, Office of the Chief Economist, said one of the reasons for increase on unclaimed dividends could be attributed to a large number of unclaimed shares in the stock market.

Umeano said the quantum of unclaimed dividend would always be on the increase as long as there were unclaimed shares.

He stated that “the main issue why unclaimed dividend is rising is because we have a large number of unclaimed shares.”

According to him, many investors during the banking consolidation bought shares with different names as well as other people’s names which they were yet to rectify.

The SEC Head in Office of the Chief Economist explained that as companies declare dividends, those accounts would equally be paid, leading to increase in unclaimed dividends figure.

The Commission, Umeano stated, introduced a forbearance window for multiple accounts to enable investors that bought shares with different names to regularise their accounts in order to reduce the quantum of unclaimed dividends.

“SEC gave a window for people to come and rectify the multiple subscription thing.

“Many people still have not been able to claim their own because some of them have forgotten the names they used.

“Some have not been able to prove to their stockbrokers that they are the owners of the shares.

“So, we still have a large chunk of those shares, and anytime dividends are paid, those shares are not claimed and those people don’t get their dividends,” said he.

He disclosed that over N100 billion out of the unclaimed dividend figures were from those unclaimed shares.

“Until we bring down that number of unclaimed shares, this unclaimed dividend problem will continue,” Umeano said.

On the way forward, he said the Commission would continue to put pressure on all the people involved in order to curb the problem of unclaimed dividends.

He urged investors to go and prove ownership of their shares, noting that SEC was not prosecuting anybody.

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