By Peter Egwuatu
The Securities and Exchange Commission, SEC has enjoined more Nigerian investors to take advantage of the on-going e-dividend registration in a bid to reduce the unclaimed dividends profile as well as increase liquidity in the capital market.
Acting Director General of the SEC, Mary Uduk, stated this at an enlightenment program on e-dividend and contemporary issues in the Nigerian Capital Market held in Enugu.
In a statement made available to Vanguard, the Head, Port Harcourt Zonal office of the SEC, Mr. Obi Adindu, who represented Uduk, disclosed that the Commission is currently leading the entire capital market industry in an effort to migrate all shareholders to an e-dividend regime.
According to her, “The essence of the e-Dividend Mandate Management System is to eradicate or reduce to the barest minimum the incidence of unclaimed dividend. Unclaimed dividend is an undesirable feature of the Nigerian capital market which denies investors/shareholders the gains of participating in the capital market. It denies the economy access to the huge amount of money which should have accrued to shareholders and would have gone into circulation to oil the wheel of the economy.
“It is a consequence of the bottlenecks which are inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, amongst others.
She stated that the e-dividend regime bypasses these limitations by ensuring that dividends which do not exceed 12 years of issue are credited directly to an investors account after declaration by the paying company and within a stipulated payment period through simple interbank transfer.
Meanwhile, commenting on the SEC’s enlightenment programme, the National Chairman, Constance Shareholders Association of Nigeria, Mr. Shehu Mallam Mikail told Vanguard that the exercise to educate investors in the Eastern part of the country was in order.
He said: “This exercise should not be one stop, it should be continuous. We the shareholders expect the commission to continue in this direction and take it to other part of the country as well.
It will help reduce the unclaimed dividend, although with a cost as SEC will no longer bankroll the charges. But we thought SEC should have left it open until majority of investors, especially those in the rural areas are captured.”