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E-dividend mandate’ll reduce unclaimed dividend — Shareholders

By Providence Obuh

Electronic Dividend (e-dividend) was introduced to forestall the rising incidence of unclaimed dividend in the Nigerian Capital Market. Shareholders who spoke with Vanguard Investors Forum, explain how e-dividend works and its benefits over paper dividend. Excerpts:

M Bello Olowonikoko, Nigerian Shareholder’s Solidarity Association: E- dividend mandate is a mandate form  that  registrars issue to investors to complete and take it to their  bank for verification of their signature. Thereafter, the investor will  return  the form to the registrar concerned  for execution.

The e-dividend helps to  reduce a lot of unclaimed dividend, and that is the one advantage.

Remember, some shareholders have been shouting that they don’t get their dividend, one of the reasons is that when they change their place of residence  without notifying their registrar, they cannot get the dividend warrant because the registrar  would have  posted  it to their former address.

But with the e- dividend mandate, the moment the e-mandate form is filled and signed by the bank after verification and returned to the registrar for implementation, once dividend is declared by a comapny, the registrar will just post the dividend   acruing to a shareholder directly into his bank account.

Do all registrars in Nigeria issue e-mandate form to shareholders?

Most registrars issue e- mandate form. When you go through annual report, there are pages  where e-mandate warrants are attached . There are two of them, one for bonus and the other for dividend .

If there is any bonus approved at AGM, instead of sending them paper certificate that majority may not even receive  due to non-notification of address change, the registrar will automatically transfer their  bonus into their   Central Securities Clearing System, CSCS, statement of account the moment the shareholders completes the form.

National Coordinator, Proactive Shareholders Association of Nigeria, Mr. Taiwo Oderinde:

e-mandate dividend is an electronic means of posting  shareholders dividend directly into his or her  bank account .

E-dividend mandate

It is for people who have mandated the registrar  to pay their dividend into their bank account  by completing the  e-mandate form .  e-dividend  mandate is a kind of instruction from the investor to the registrar. It  is usually attached to the back of the Annual Reports. By completing the form, you are  mandating the registrar to stop paying you physical dividend but to credit your dividend  directly into your bank account. It has to do with electronic crediting. It is the best; immediately your account is credited, you will  receive  alert that you have been paid. Unlike physical  dividend, e-dividend cannot be stolen, misplaced, lost or destroyed by fire or water.



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