By Modupe Gbadeyanka
Acting Director-General of the Securities and Exchange Commission (SEC), Ms Mary Uduk, has explained how unclaimed dividend negatively affects the nation’s economy as well as investors and shareholders.
The SEC chief, who was speaking on Wednesday at a town hall meeting in Port Harcourt, Rivers State on current initiatives by the agency to enhance investor value, disclosed that unclaimed dividend 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
According to her, “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.
“It is a consequence of the bottlenecks which are inherent in the erstwhile paper dividend warrant regime such as postal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, amongst others.”
Business Post reports that on November 23, 2016, the apex capital market regulator in Nigeria, SEC, started the e-dividend registration exercise.
Each successful registration costs N150. However, between that time and March 31, 2018, the commission underwrote the registration cost for all investors that mandated.
In a statement issued by SEC yesterday, Ms Uduk was quoted as saying at the event the essence of the e-Dividend Mandate Management System is to eradicate or reduce to the barest minimum the incidence of unclaimed dividend.
She further said the e-dividend regime bypasses these limitations by ensuring that dividends which do not exceed 12 years of issue are credited directly to an investors account after the declaration by the paying company and within a stipulated payment period through simple interbank transfer.
Also, the SEC chief, at the town hall meeting, advised Nigerians not to fall for investment firms which promise them mouth-watering returns for little amount.
She said investors should do a thorough background check on such companies before parting with their money.
“There is the added and all-important purpose of ensuring that the gains of your participation, be these dividends, proceeds from share sales/transfers, etc. accrue to you seamlessly, without sweat and in the shortest time possible.
“The purpose is also to ensure that you do not fall victim to the antics of fraudsters who purport to be able to double any amount of money you make available to them as investment value.
“These fraudsters or promoters of Ponzi Schemes are the false prophets of the investment environment, they are the ill wind that blows no good and at whose sight you must flee; they are to be avoided.
“This is one message you must take home to family, friends, relations and acquaintances in order to save them from the agony of loss of their hard–earned money.”
Ms Uduk explained that the specific objective of the meeting was to keep Nigerians abreast of the initiatives that SEC is currently undertaking in order to make the capital market more user friendly such that people can participate in it with greater ease, comfort and convenience.
