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March 6, 2024

Reps query operators of capital market over unclaimed dividends

Reps

The House of Representatives Committee on Capital Markets and Institutions has queried operators of the capital market over unclaimed dividends by shareholders.

The committee said that it was necessary to ensure a healthy business environment in Nigeria where investors would be safe and could conduct their businesses with peace of mind.

Rep. Solomon Bob, the Chairman of the committee, said this in Abuja on Wednesday when the operators of the capital market appeared before the committee to answer questions bothering on unclaimed dividends.

He asked the operators why Nigeria is bedeviled with so many unclaimed dividends, while also asking them what they had done in their respective capacities to stem the tide.

“Why do we have such huge amounts of unclaimed dividends, and what are the chairmen doing in their respective positions to ensure that such unclaimed dividends become history?”

He said, “how well are you complying with the law? We need to know the extent to which you have gone to ensure compliance in the payment of unclaimed dividends.

“We want to ensure a healthy business environment in Nigeria where investors are safe and can conduct their business with peace of mind.”

Mr Bayo Olugbemi, the Managing Director, First Registrar and Investor Services Ltd., said the history of unclaimed divides was a long one, adding that there was a time we had as much as 40 per cent unclaimed dividends.

He, however, said that as of today, unclaimed dividends were less than five per cent, adding that the figure was still huge.

Olugbemi, who is also the immediate past president of the Institute of Capital Market Registrar, said that in the past five years, we have put in place a lot of initiatives that have reduced the quantum of unclaimed dividends.

He said, “we do send divided warrants to shareholders, but we stopped in 2015. So, the onus is on shareholders to give us their account details.

He said that in the last five months, N200 million of unclaimed dividends had been paid, adding that on a quarterly basis, they often make returns to the Securities and Exchange Commission on dividends unclaimed below 15 months and above.

According to him, it is difficult to keep this money. When shareholders die, there are processes to claim their dividends, and a lot of people who died and have not collected their dividends did so because their representative refused to come forward.

He said, “We want to make the capture of dividends seamless, and a lot of shareholders have not done so. If shareholders and owners refuse to give us their mandate, they won’t be captured.

Mr. Dele Ilorin, MD, Unity Registrar Ltd., on his part, said the issue of unclaimed dividends had been a serious concern, adding that apart from shareholders who were yet to release their certificates, more than 50 percent were still holding down.

He said the issue of dividend warrants had been an issue, adding that some people would never come forward to claim theirs.

“We still need serious enlightenment. On unclaimed dividends, some people have N2.50k, so they see no need to collect it, but if they have a million, it will not be outstanding; it is just the lower ones that refused to collect.

Mr. Ugo Okonkwo, MD, Veritas Registrar Ltd., said the job of the SEC is to ensure that there is no foul play; the challenge is how to get the investors to claim their dividends.

According to him, if they fail to come forward, then what else can we do.