Investors have expressed doubts over the ability of registrars to cope with the expected growth and increased patronage in the Nigerian capital market in the next couple of years.According to the investors who spoke with Financial Vanguard, this is as a result of the failure of most registrars to adopt and fully deploy electronic products and information technology infrastructure in their operations.
According to investors, failure of registrars to fully adopt electronic processing technologies have caused untold hardship for stakeholders in the Nigerian capital market, as it has led to high incidence of delay, irregularities and frauds among others.
The complaints of investors include loss of share certificates, delay in receipt of dividend warrants, notice of meetings and companiesâ€™ annual report.
The increased awareness in the Nigerian capital market started in 2005 during the consolidation exercise in the Nigerian banking sector. During the period, banks embarked on massive publicity and campaigns to promote their fund raising efforts in a bid to meet up with the stipulated minimum capital requirement of N25 billion
After that, a little before the global financial crisis set in, another round of market_induced consolidation was embarked by the banks, with many of them raising as much as N100 billion from the market.
As a results of these, a number of individuals,Â who initially had little interest for the stock market, where cajoled by these banks, through their advert, publicity campaigns and marketing agent, to participate in the offers.
By the end of 2007, the number of investors in the capital market grew from about 2.5 million to over 10 million.
The unprecedented increase in patronage recorded in the stock market, brought about significant increase in activities in the market, with increased pressures on market operators – stockbrokers and registrars.
While stockbrokers are concerned with the trading of shares on behalf of their clients and on their own account, registrars are saddled with the responsibilities of effecting the transfer of ownership of shares, despatch of share certificates and dividend warrants to investors among others.
The Securities and Exchange Commission (SEC) had introduced a number of measures aimed at ensuring transparency in theÂ capital market whereby investors would benefit from their investments in a prompt and regular manner.
Among such measures are the introduction of Electronic Dividend, (e-dividend) payments and Electronic Allotment (e-allotment) system, while plans are at an advanced stage to introduce Electronic Initial Public Offer (e-IPO) in the Nigerian capital market in order to ensure significant improvement and enhance efficiency.
SEC had also planned a re-certification exercise for registrars, which is aimed at determining the level of information technology infrastructure put in place by registrars to support the growing volume of business activity in the market.
SEC noted that the it is paramount for registrars to upgrade their infrastructure, so asÂ to meet current and future challenges.
However, a cross section of investors interviewed, revealed that the registrars have failed in the discharge of their duties and have shown their inability to handle the expected increase in the capital market in the near future.
They complain of delay in receipt of their share certificates and sometimes dividend warrants, notices of meetings, effecting share ownership and transfer among others.
According to Mr. Taiwo Oderinde, National Coordinator, Progressive Shareholders Association of Nigeria (PROSAN), registrars still have a lot to do, they need to comply with electronic processing services such e-bonus, e-allotment, among others.
They should alsoÂ step up their activities so as to meet up with global standards. Lastly, prompt payment of declared dividends, timely postage of annual reports among others, should be paramount in the activities ofÂ Registrars.
Mr. Olufemi Timothy, President, Renaissance Shareholders Association, said, â€œTo some extent, they have been effective, but they still have a lot to do in the interest of investors and development of the capital market.
â€œRegistrars, must put the interest of shareholders first, by reducing our hardship in areas of verification of unclaimed dividends, late postage of annual report payment of dividends among others.
â€œThey should improve on their electronic platforms to make service delivery more efficient and effective. Any of them that has not decentralised their operations should be made to do so immediately, so as to bring services closer and ensure investorsâ€™ convenience.â€
Also speaking, an investor Mr. Babatunde Moshood said, â€œInvestors are going through hell, if I know of anybody who wants to invest, I will advice such a person not to invest, people should just go ahead and enjoy their money rather than investing without seeing anything.
â€œDividends will be released by companies, if you are lucky enough, you will get it, if not, they will continue to toss you about like football, either they will tell you signature is incorrect, address is incorrect, they just have an excuse to delay somebody.
â€œIn 2007, my dividend was released by PZ Cussons Nigeria Plc, I then gave my broker the certificate so that he can help me do the necessary things so that I can collect my dividend, but he came back to me with forms indicating that I should go to my bank and verify my signature, that the registrars claimed thatÂ is not correct.
â€œI did just as I was told, the bank verified my signature and signed below, that my signature was correct but to my greatest amazement, when I came back to the registrar they told me that even the signature of the people that signed for me are wrong, I do not know, I can not comprehend it.
â€œEvery week, I pick at least one day to visit my registrars, about seven of them, but so far, First Registrars is the worst because the crowd I see there cannot be compared with over this issue and nothing has been done till date. They should do something because I am tired of wasting transport fare to this place every week without result.
â€œIt was just last week they gave me an appointment letter that I should visit this week that they will resolve my case and my prayer is that they will not disappoint as they promised.
â€œIf I had to say anything about their services, I will say it is fair to some extent because when you come, they ask you to collect the ticket number and seat until you are called, I believe with this there is orderliness, but on the other hand their delay is much because every day you go there, there must be crowd of people waiting that you hardly find seat to seat down sometimes, this I can say is bad, when you are coming to them be ready that you might likely spend the whole day depending on your complaint and some also use between one to three hours before they can leave.
Mr. Ogamba Honest, a shareholder, who spoke to Vanguard in the premises of First Registrars said, â€œThis is my second time of being here, I complained initially that I want my dividend to be forwarded to my account and they ask me to fill form so that they can be able to pay it into my account.
â€œThe unfortunate thing now is that they still send this dividend to my address instead of my account. This is my complaint and another thing I can say is that there is delay of service here, and the crowd here is too much.
â€œYou have people coming from distance places to this place if it is possible let them split there office to other places because I came all the way from Ikorodu to this place and is too demanding for me because I left my job and other things I would have love to do.
â€œIf they did not rectify this problem I will still be coming just like some have been coming although I can not afford to be wasting transportation fare on things I know could be done within a twinkle of an eye.â€