Unclaimed dividends in Nigeria capital market hit N148.11bn in 2018

In spite of various initiatives introduced by the Securities and Exchange Commission (SEC), unclaimed dividends in the Nigeria capital market stood at N148.11 billion in 2018, according to a source familiar with the SEC.

The source said the value of unclaimed dividends in the market as at Dec.31, 2018 stood at N148.11 billion.

The source noted that registrars with the highest unclaimed dividend were First Registrars, United Securities, Africa Prudential, DataMax Registrar and Cardinal Stone Registrar.

According to the source, the rise in unclaimed dividends figures was due to new dividends being declared, death of the owners and relative inability to claim the dividends.

Law provides that 15 months after dividends have been declared, unclaimed ones should be returned to the companies.

Ms Mary Uduk, SEC Acting Director-General, said recently, that the commission was making efforts to reduce the unclaimed dividends in the market.

Uduk noted that the introduction of the electronic-dividend Mandate Management System was one of such initiatives.

“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,” she said.

She noted that the e-dividend allows investors’ accounts to be credited immediately they are mandated with the registrars and the relevant banks.

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“Within 24 hours your dividend hits your account and even the backlog that was not paid for years also hits the account.”

Uduk said that the commission also introduced multiple subscriptions to allow investors to regularise their multiple accounts to reduce unclaimed dividends.

“Many of them do not even remember the names with which they bought the shares and this increases the quantum of unclaimed dividends in the market.

“That is why we are engaging with the receiving agents to check into their records and see how this can be reduced and the owners can claim their dividends,” she said.

The acting D-G said that the commission would continue to collaborate with relevant stakeholders to sensitise investors on the need to regularise their multiple accounts as well as claim their dividends.

Uduk stated that the volume of unclaimed dividends was still huge noting that the commission was doing a lot to bring it down.

She explained that the commission had taken various steps to ensure that shareholders benefit from their investments in the capital market.

The director-general said the commission had exposed an amendment to its rules which reduced the time, processes and costs of the transmission of shares from a deceased to the beneficiary.

She said that this was done to reduce the quantum of unclaimed dividends in the Nigerian capital market and encourage beneficiaries of deceased investors to step up efforts to claim such dividends.

“The timeline for the transmission of the deceased’s shares has been reduced from three weeks to one week.

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“Going by that, registrars shall ensure that shares of a deceased are transmitted within a week of receiving the request from the administrators or executors.

“This effort will ensure seamless transmission and claim of a deceased’s shares by heirs and administrators.”

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