Dipo Olowookere
By Dipo Olowookere
One lingering major problem in the Nigerian capital market the Securities and Exchange Commission (SEC) is not happy about is unclaimed dividends.
Business Post reports that despite the efforts of the apex capital market regulator to reduce the N158.4 billion unclaimed dividends in the market, not much progress has been made.
But the new Director-General of SEC, Mr Lamido Yuguda, seems to know the root cause of this stubborn problem and he is ready to face it head-on.
Investors at the capital market have always complained about the bottlenecks faced when trying to get the reward of their sweat, especially in the hands of registrars and some stockbrokers, who are not efficient in the discharge of their duties.
The SEC DG, while addressing newsmen at the weekend, said the agency will address these issues and work with registrars, the Central Securities Clearing System (CSCS) and stockbrokers to come up with easier ways of processing the unclaimed dividends.
“We have the e-dividend mandate at the moment, which should substantially take care of the accumulation of new unclaimed dividends in the future. I know this is not working exactly perfectly, but it has substantially reduced the accumulation of new unclaimed dividends.
“The task now is to work with the registrars to make it easy for shareholders to be unbundled unto the system.
“I know there are complaints in the market that some shareholders are finding it a little difficult or some registrars are not working quickly to get people unbundled,” Mr Yuguda said.
The capital market expert said he was deeply worried at the level of unclaimed dividend in the space, promising to make investors happy.
It was gathered that as at December 2019, the value of unclaimed dividends stood at N158.44 billion and according to Mr Yuguda, some of them have already been returned to the companies in line with the law, with a little percentage still with the registrars.
But he promised that his team and other stakeholders will look into the issue and announce the outcome of the deliberations to the investing community soon.
“These are issues we are also looking at and we will come out to the market very soon with a statement about it,” the SEC DG told capital market reporters.
In addition, he said the agency was looking at ways to simplify transactions in the capital market to attract more investors, explaining that the mode of transactions had been complicated due to the number of processes to invest in the market.
“From the point of parting with your money to the point of getting the money in the form of dividend or as proceeds from the sale of stocks bought, the process is extremely complicated.
“For many people, that complication is a long tunnel because they do not want to go through that process and you will agree with me that along that line, a lot of things happen.
“For example, people part away with their money and never get any shares, while others get shares but the shares become worthless at some point and so there are a lot of things that we need to do to simplify transactions in the capital market.
“The process of capital market investment is extremely complicated for many people that complication is a put off because they don’t really want to go through that process,” Mr Yuguda said.
