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Shareholders speak on re-opening of dividend warrant issuance by SEC

By Nkiruka Nnorom

The Securities and Exchange Commission, SEC, recently said it is continuing with the issuance of dividend warrant more than one year after closing the exercise to allow it sort out some outstanding issues. Shareholders who spoke to Financial Vanguard expressed a divergent opinion on the issue.

Alhaji Gbadebo Olatokunbo

SEC should be more decisive on termination of dividend warrant — Shehu Mallam Mikaili

I think SEC is just beating about the bush. It should take a decisive decision as regards compelling all public companies and shareholders to key into e-dividend. Going back and forth is not ideal. The only thing that is going to help is for SEC to disseminate information to the grass-roots and enlighten the people at the grass-roots to key into the e-dividend initiative. Likewise, the SEC should take be proactive in reducing or even removing the cost of mandating accounts. In fact, mandating accounts should be free. More so, instead of continuing with the issuance of dividend warrant, registration for e-dividend should be extended possibly to the year 2020. I believe that by 2020 and with enough enlightenment campaign by both the SEC, Nigerian Stock Exchange, NSE, the stockbrokers, registrars and even the Central Securities Clearing System, CSCS, more shareholders would understand and be aware of the existence e-dividend. The regulators should also find out ways of reaching shareholders with an unclaimed dividend.

The law does not allow any regulator to deny investors their dividend — Alhaji Gbadebo Olatokunbo

SEC came about the directive on electronic dividend payment and it was targeted at achieving some purposes such as reduction or elimination of unclaimed dividend. It is to make it easy for shareholders to claim their dividend as well as to encourage investors to make use of the banking system among others.

However, despite efforts by the stakeholders to encourage and embrace the policy on e-dividend, some shareholders are still having problems with the policy. For instance, many bank accounts are dormant and owners are not interested in them due to reasons known to them. Secondly, many investors have relocated to their villages either due to retirement or loss of their jobs and there are no banks at their locations and they are not also ready to go the extra miles because it will cost them more than the amount to be collected as a dividend.

After keying into e-dividend, we still get dividend warrants – Shareholders

Therefore, SEC has to be reasonable knowing that there will be bigger problems insisting on the policy deadline. It is very very important to note that the law doesn’t allow any regulatory agency to deny any investor the return on investment – dividend.

It will allow more investors key into e-dividend  — Patrick Ajudua

•Patrick Ajudua,  National Chairman, New Dimension Shareholders Association, NDSA.

I think it is a very good thing because of the existing problems like lack of enlightenment on the importance adoption of electronic dividend by some investors. I think that it will also offer more opportunity to people in the rural areas to key into the e-dividend registration exercise so that the aim of reducing unclaimed dividend will be achieved. This is what we have been saying; there is a need for more awareness on the on-going e-dividend before the issuance of dividend warrant will be finally stopped. Though I do not think that nine months will be enough to sort out all outstanding issues but it will go a long way in allowing more people to mandate their accounts. That said, SEC really needs to go out and create deeper awareness; there is the need to communicate to more people in their local languages on the need to stop issuance of physical dividend warrant and embrace e-dividend. The registrars should also do their own work. We have to go the way other markets around the world are going; we need to embrace technology.

It is a good   development — Moses Igbrude

Igbrude Moses

Life is dynamic when one takes some decisions thinking it will bring certain desired results and it didn’t, the wise thing to do is to revise such decision and that is exactly what SEC is trying to do.

SEC at a meeting with stakeholders two years ago thought that by eliminating dividends warrant it will reduce cost and companies will save money for the shareholders as well as reduce unclaimed dividend but this rather started increasing the unclaimed dividend as many Nigeria investors did not key into it.

So, for me, this is a good development because the best thing to do in this situation is to restart the issuance of dividend warrant again and gradually encourage people to key into the e-dividend initiative.


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