By Peter Egwuatu
IT appears that the e-dividend policy initiated by the Securities and Exchange Commission, SEC is beginning to yield fruits as the value of unclaimed dividend has dropped by N30 billion from over N80 billion in 2016.
The Commission had recently stated that over N30 billion has so far been paid to investors in the Nigerian capital market from the backlog of unclaimed dividends.
As a means to further reduce the unclaimed dividends profile and curb its growth in the country, the Commission did notified the investing public that it will continue to underwrite the cost of e-Dividend enrollment till 30th June, 2017.
It will be recalled that the SEC had stated that with a view to ensuring that all investors benefit from the free e-dividend programme, it had committed to pay the cost of enrollment throughout the year 2016, and had resulted in getting about 48 per cent of investors to enroll for the e-dividend payments.
Arising from this exercise, over N30 billion which was hitherto unclaimed have so far been credited to respective bank accounts of investors.
Given this development, one can say that the call for the establishment of Nigerian Capital Market Development Fund, (NCMDF) should be discarded.
Shareholders of quoted companies on the Nigerian Stock Exchange, NSE had criticised the SEC over its proposed plan to float NSMDF as part of its measures to addressing the rising unclaimed dividend which had risen to over N80 billion.
The shareholders who had spoken with Vanguard, with the exception of a few had said that they do not have the confidence in the Commission to manage shareholders funds as evidence had shown in the past that most funds managed by government officials were mostly misappropriated.
The shareholders equally stated that the SEC has no business managing their fund as its plan is to reap where it did not sow. They further opined that the Companies and Allied Matters Act, CAMA 1990 was long overdue to be amended given the changing and evolving economic and market conditions.
Shareholders who spoke following the calls by the SEC for quoted companies and registrars to send comment and input over its proposed rule on application of 12 years and above unclaimed dividend, vehemently opposed the idea of setting up NCMDF, saying that in the past, the Commission had sponsored similar Bill on unclaimed dividend and abandon property, which was finally rejected by the National Assembly when majority of stakeholders kicked against it during the time of the public hearing.
According to the proposed rule, the SEC stated “Pursuant to the provisions of Section 313(1)(n) of the Investments and Securities Act (ISA) 2007, the commission hereby proposes this Rule: Companies and Registrars in custody of dividends which remain unclaimed by shareholders 12 years after the date of declaration or subsequently attain the 12 years threshold shall upon the coming into effect of this Rule transfer such monies into the Nigerian Capital Market Development Fund (NCMDF).
“ All companies and registrars shall not later than 30 days after the end of every calendar year forward to the Commission a report of unclaimed dividends in their custody, which shall specify compliance with Sub Rule (1) of this Rule. Companies shall disclose details of compliance with this Rule in their annual reports.
As the shareholders who are owners of these companies that declared dividend and yet not claimed are opposing the call for the establishment of NCMDF given the fact that similar agencies of government in the past had not been able to manage funds placed with them adequately and efficiently; and due to the fact that current e-dividend registration has started yielding fruits, therefore, it will be reasonable if the SEC can abandon the pursuit for the establishment of NCMDF, while the enforcement of e-dividend continues.