House Decries N200bn Unclaimed Dividends
The House of Representatives has expressed concerns over a projection that unclaimed dividends will hit N200bn or more by the end of 2020.
According to the House, this is not a good picture of the state of the capital market and should be a source of concern to watchers.
The House Committee on Capital Markets and Institutions recalled how in 1999, unclaimed dividends were valued at N2.09bn; N100bn in 2017; N120bn in 2018; and N158.44bn by end of 2019.
Chairman of the committee, Mr Babangida Ibrahim, at an investigative hearing on the rising value of unclaimed dividends, unremitted Withholding Tax on dividends and their attendant effects on the economy, stated that huge accumulated unclaimed dividends were a major challenge to the development of the capital market.
He stressed that despite the efforts by capital market regulators, the issue still lingered.
Ibrahim warned that a high volume of unclaimed dividends had a very significant implication on the economic development of Nigeria, including reduction of investors’ confidence, decrease in the availability of long-term capital for economic development and the likely volatility in the regulation of the capital market.
The lawmaker said, “We are aware of measures that have been taken by the capital market regulators in the past to address the problem but we can all see that the problem remains and in fact the situation is worsening by the day.
“Some of the measures include e-dividend, dematerialisation of share certificates, publication of names of owners of unclaimed dividends, etc.
“All these measures are very commendable especially the fact that they are primarily aimed at ensuring that the shareholders who are owners of the dividends get the benefits of their investments.
“It is important to underscore this point: dividends are distributions of earnings to shareholders. Dividends, whether cash dividends or share dividends also known as bonus shares, belong to the shareholders and not to the company who distributed them or the government.
“Therefore, every effort must be made to ensure that the shareholders get their dividends from their hard-earned investments.”
The Director General of SEC, Lamido Yuguda, in his presentation, told the committee that about N29bn of the unclaimed dividends had been claimed by investors through the introduction of regularisation of multiple accounts.
The SEC had introduced the regularisation of multiple accounts in 2015, where it requested all shareholders with multiple accounts to harmonise their accounts by filing e-dividend mandate forms and submitting same to their banks or stock brokers for onward transmission to their respective registrars.
Yuguda also announced that SEC was currently working on an initiative to ensure consolidation of multiple accounts, which involves the verification and isolation of the account beneficiaries with a deadline of first quarter of 2021.
