Shareholders task CBN, SEC on banks’ dividend warrant acceptance

By Peter Egwuatu

SHAREHOLDERS have called on the Central Bank of Nigeria(CBN) and Securities and Exchange Commission(SEC) to quickly mandate banks operating in the country to honour dividend warrants that are paid into savings account as this would help reduce the value of  unclaimed dividend which had risen to over  N17 billion.

The shareholders said the refusal of dividend warrants by banks into saving accounts will further aggravate the value of unclaimed dividend in the country
The National Coordinator, Proactive Shareholders Association of Nigeria,  Mr. Taiwo Oderinde in an interaction with Vanguard said: “ It is very painful for an ordinary shareholder to pay genuine dividend warrant into its savings account only for the bank to reject it  This will make life difficult for them. Why are the banks encouraging people to save? Everybody cannot operate current account because of the high Cost of Transaction (COT) that many of the banks charge. Some people prefer to have savings account and hence should be allowed to pay their dividend warrants in the account.”

Another shareholder leader, Mr. Owolabi Peter who spoke the minds of shareholders at the recent Annual General Meeting of Cornerstone Insurance Plc held in Lagos said, “It is high time that CBN and SEC collaborate to call the banks to order. One of the major causes of the unclaimed dividend is the non acceptance of dividend warrants into savings account.

CBN Governor, Mallam Sanusi Lamido Sanusi

He further bemoaned banks asking shareholders to open new  account meant for dividend warrants.
According to him, “ How many accounts should shareholders open. If a shareholder have 20 banks’ shares, so he should open 20 accounts. This is not the practise in developed economies.”

Narrating his ordeal, he said, “ I bought shares for my children and I have savings account but my bank refused to accept their dividend warrants into the savings account. So the bank want me to open several current accounts for my children. How can I open a current account for children that are not working and those that have not reach maturity age.So this problem if not addressed will continue to  impact on the value of unclaimed dividend.”

Vanguard gathered that the unclaimed dividend in the country stood at N17.9 billion as at December 2008.
According to SEC report , the unclaimed dividend has risen significantly over the years to about N17.9 billion as at December 2008,  from N2.09 billion as at third quarter of 1999.

Record reveals that Nigerian Breweries Plc recorded the largest unclaimed dividends as at the period December 2008.
Nigerian Breweries total amount of unclaimed dividend is put at N4.42 billion, followed by Bank PHB with holdings of unclaimed dividends worth N4.14 billion. The third company on the list is Intercontinental Bank with unclaimed dividend valued at N3.4 billion, and Diamond Bank with unclaimed dividend worth N3.34 billion.

Conversely, Law Union led the list of companies with minimal holdings of unclaimed dividends as at the period under review. Law Union’s unclaimed dividend is valued at N6.6 million; followed by Linkage, N5.87 million; Oasis, N3.33 million, and Costain, N159,188.48.

The N17.9 billion unclaimed dividends is the total  reward of investment declared by quoted companies  and paid out by way of dividends but remain unclaimed by shareholders 15 months after declaration.