Unclaimed dividend increases by 14.4%

WITH the increase in the declaration and payment of dividend to company shareholders, the value of unclaimed dividend has risen to N103 billion as at the end of December, 2017, against N90 billion declared in the preceding year.

The Director-General of the SEC, Dr Abdul Zubair, while addressing participants at the maiden edition of ‘Dividend Payment Awards For Nigeria’s Listed Companies,’ organised by Third Observers Nigeria Limited in Lagos has disclosed that despite efforts by the commission for shareholders to get backlogs of unclaimed dividend through different initiatives, the success was not too satisfactory.

The SEC boss, who was represented by the Director of the commission, Rowland Henry, bemoaned the poor investors’ patronage on e-dividend registration in the market, noting that huge amount of unclaimed dividend discourages investors from investing in the stock market, while maintaining that the era of stale dividends and huge unclaimed dividends in the market would be a thing of the past if investors’ would key into the e-dividend payment platform.

“Huge amount of unclaimed dividend will discourage both local and foreign investors and make them to look at other asset classes like the fixed income market.”

Subsequently, he enjoined all shareholders and investors in the Nigerian capital market to complete e-dividend mandate documents with their banks and registrars

Furthermore, the commission advised registrars to exercise caution while validating names generated by the system to avoid dissimilarity with the physical forms.

The e-registration platform was designed as part of efforts by the Capital market regulatory authority to eradicate the difficulties encountered by retail investors in claiming their dividends through their savings account.

Despite measures put in place by the Securities and Exchange Commission (SEC) to stem the rising figure and put an end to the cankerworm, investors’ returns on investment have continued to accumulate on a yearly basis without being claimed.

Zubair, had in a recent Capital Market Committee meeting, announced that the deadline for the free registration, that has been paid for by the commission since the introduction of the e-dividend would continue till February 28, 2018.

According to the commission, in reviewing the progress of the e-Dividend registration exercise after the December 31, 2017 deadline, it was noted that there was still a great influx of shareholders desirous of mandating their bank accounts for payment of dividends electronically.

“In light of the foregoing, the SEC, as part of its developmental role, has extended the period for the free e-Dividend registration exercise till February 28, 2018, to encourage more shareholders mandate their bank accounts.