By Babajide Komolafe

Another major revelation in the various complaints of investors is that of attitude of regulators and market operators to the problem of unclaimed dividends. Severally, we have received complaints from investors, who have invested for years and they have never received dividend. Many of them want to collect their dividend and they had made attempts, but they were deliberately frustrated. A classical example is the complaint from Mr. Udenta Christopher, who said:

“I have been in a running battle with Datamax Registrars Ltd of 7 Anthony Village Road, Anthony, Shomolu Lagos, since last July.  Datamax has refused to remit my dividend declared by GT Bank for the year ended 31/12/2012, payable 25/04/2013. Through an e-dividend payment advice sent to me, Datamax claimed to have paid the money into my GTB account, but checks at two branches of GTB in Onitsha showed that it was never credited to my account.

I called Datamax on the 19th of July and an official, who refused to disclose his name directed me to send them my statement of account for the period 25/04/2013 – 30/04 /2013. I sent the statement through GTB on 22nd July. After one month of silence, I called Datamax on 21st August, but they claimed they had not received my correspondence. I had to resend it the same day through GTB, but Datamax has kept mute about it up till now. Please assist me”.

This compliant reflects why the value of unclaimed dividend has continued to increase. The market introduced electronic dividend, which makes it possible for dividends to be paid directly into shareholders’ account, but the effectiveness is seriously undermined by the operators, especially the registrars and the companies. First, there is no concerted effort to publicise e-dividend.

The regulators are supposed to do a massive enlightenment campaign akin to the one conducted to promote the cashless policy. Similarly, little or no effort is being made by the companies and registrars to promote e-dividend among shareholders.

Most of them just created forms for e-dividend application on their websites, nothing more. Hence from time to time, we receive inquiries from investors on how to receive dividend directly in their bank accounts.

In addition to lack of awareness campaign, the procedure is also discouraging. You go to the registrar, complete a form, but you must get a Bankers Confirmation letter as evidence that you are the owner of the account. The first challenge is that you can only use current account for e-dividend and this automatically exclude millions of shareholders who don’t have current account. E-dividend is akin to funds transfer, and if funds transfer is allowed into savings account, why exclude them from e-dividend.

The second challenge relates to those that have shareholding in companies with different registrars. And most investors do. Each registrar requires that you bring a different Bankers Confirmation specifically addressed to it. This means that you have to pay the bank for as many Bankers Confirmation letters as you need to submit for e-dividend. Coupled with this, is the fact that it can take more than two days to obtain this confirmation in some banks. The reality is that the whole process may take up to one week. And that is why even investors, who are knowledgeable about it have not applied for it, and that is why unclaimed dividends has continued to increase.