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Unclaimed dividends now N60bn – SEC

Ms Arumah Oteh
The value of unclaimed dividends by investors in the Nigerian capital market at the end of last year was N60bn.

The amount represents an increase of 46 per cent or N19bn over the N41bn that was recorded at the end of 2011.

Unclaimed dividends refer to dividends payable to shareholders but have not been accessed by the beneficiaries for a period of not less than 12 months.

The Director-General, Securities and Exchange Commission, Ms. Arunma Oteh, disclosed the actual value of unclaimed dividends for 2012 to our correspondent on the sidelines of a media briefing by SEC on the Nigerian capital market in Lagos on Wednesday.

Our correspondent had last week reported that analysts and market watchers had projected that the value might be up to N50bn.

Oteh blamed the rising amount of unclaimed dividends on the challenges facing the postal system in the country, adding that the amount would reduce largely if the challenges were addressed.

She said another major reason for the accumulation of unclaimed dividends was ignorance on the part of shareholders or when they changed their forwarding addresses without informing the registrars of companies they invested in; thus, making them to be unable to receive dividend warrants.

Oteh, however, said that SEC was involved in various efforts aimed at reducing the amount to a reasonable level this year.

She said, “We have been made to understand that the amount of unclaimed dividends for 2012 stands at about N60bn, and we at the commission are making concerted efforts to ensure that this amount reduces.

“We have gone into various discussions with registrars and company directors on how this amount can be reduced, and we are sure all these efforts will yield positive results in the next few months.”

Oteh explained that SEC frowned on the situation where companies declared dividends at the end of the year but did not give the registrars the necessary cash backing to ensure that the dividends were disbursed to shareholders, adding that this had also contributed to the rise in the amount of unclaimed dividends.

“SEC is coming up with a policy to ensure that companies, which declare dividends, give out such amount declared to the registrars for onward disbursement to the shareholders; this will lead to a significant reduction in the amount, going forward,” she said.

She said when the new Chairman of the SEC Board, Mr. Suleyman Ndanusa, was the director-general of the commission, the amount of unclaimed dividends stood at N8bn only, adding that he had promised to ensure that the current amount was reduced drastically.

The PUNCH had exclusively reported last week that the total amount of dividends declared by quoted companies but not claimed by investors in 2012 might hit N50bn.

A stockbroker, who preferred anonymity, had told our correspondent that with the way things were going, it was likely that the amount of unclaimed dividends would be significantly higher than the previous year’s.

He said a lot of issues concerning unclaimed dividends were left hanging and had yet to be addressed, adding that this might lead to further increase in the amount this year.

The stockbroker said, “I think if the regulators and other concerned stakeholders want to be sincere, they will admit that the figure for unclaimed dividend would likely rise to about N50bn.

“This is because there are a lot of unresolved issues in the area of getting dividend warrants to investors, especially the retail investors, who have small amounts of dividends.”

Source - Punch News

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