Capital market stakeholders, yesterday, reacted differently  to the payment of dividends in foreign currencies by cross-border  companies listed listed on the Nigerian Stock Exchange (NSE).

File photo: The floor of Stock exchange

Shareholders alleged in separate interviews in Lagos that companies listed on the NSE  and other exchanges are insisting on the payment of dividends in foreign currencies. They said that payment of dividends in foreign currencies and the companies’ insistence that Nigerian shareholders must open domiciliary accounts would increase the profile of unclaimed dividends in the market.

Alh.Gbadebo Olatokunbo, founding member, Nigeria Shareholders Solidarity Association (NSSA), said that companies were under obligation to pay dividends in Naira, whether foreign or cross-border. He said that shareholders should not be compelled to open domiciliary accounts because of dividends, noting that many of them would convert the dividends declared and pay to shareholders in naira. “The Nigerian currency is the Naira and not the dollar and shareholders should not be forced to open foreign accounts for dividend payments,” he said.

On his part, Mr. Boniface Okezie, President, Progressive Shareholders Association of Nigeria (PSAN), said that companies listed on the NSE must ensure payment of dividends in the country’s currency. He said that shareholders must not be compelled to open domiciliary accounts for payment of dividends for companies operating in Nigeria.

“Seplat, as a company operating in Nigeria, owned by Nigerians or even if it is foreign-owned, must not dollarise our economy,” he remarked. Okezie also urged the Securities and Exchange Commission (SEC) to look into the issue, in the interest and growth of the market.

Speaking from a different perspective, Mr. Bayo Adeleke, National Secretary, Independent Shareholders Association of Nigeria (ISAN), noted that companies such as Seplat and ETI, with cross-border listings pay dividends in hard currency. According to him, shareholders were aware of the development before investing in the companies. He recommended that local arrangements should be made to assist shareholders having issues with domiciliary accounts.

Mr Olaleye Williams, Managing Director, GlobalView Investment Ltd, said that the development would enable Nigerian investors to earn their dividends in foreign exchange. He however canvassed that shareholders should be given an option of local or foreign currencies by the registrars. “I wonder what would have been lost if investors are given options on how they want their dividends without necessarily increasing the cost of administration,” he added.