Share this:

Like this:

Like Loading...
" />
Published On: Thu, Nov 19th, 2020

Projection: Reps wory over projected N200bn unclaimed dividends at close of 2020

Share This

By Christiana Ekpa

The House of Representatives yesterday expressed serious concerns over the projection that unclaimed dividends will hit N200 billion or above at the close of 2020.
The Lawmakers equally disclosed that the development dose not paint a good picture of the state of the capital market and should be a source of concern to capital market watchers.
It recounted that in 1999, the value of unclaimed dividends was put at N2.09 billion; it was N100 billion in 2017, N120 billion in 2018 and at the close of 2019, it had risen to N158.44 billion.
Chairman, House Committee on Capital Markets and Institutions, Babangida Ibrahim(APC, Katsina) stated this
during an investigative public hearing on:The Need to Investigate the Rising Value of Unclaimed Dividends, Unremitted Witholding Tax on Dividends and their Attendant Effects on Nation’s Economy,” held at the National Assembly Complex, Abuja.
Ibrahim said the problem of huge accumulated unclaimed dividends is a major challenge to the development of the Nigerian Capital market, stating that despite the efforts of capital market regulators, the issue of huge unclaimed dividends remains a lingering problem.
According to him, the problem of the huge volume of unclaimed dividends has very significant adverse implications on the economic development of Nigeria, including adverse investor’s confidence, decrease in the availability of long-term capital for economic development and the likely volatility in the regulation of the capital market.
“We are aware of measures that have been taken by the capital market regulators in the past to address the problem but we can all see that the problem remains and in fact the situation is worsening by the day.
“Some of the measures include e-dividend, dematerialization of share certificates, publication of names of owners of unclaimed dividends, etc. All these measures are very commendable especially the fact that they are primarily aimed at ensuring that the shareholders who are owners of the dividends get the benefits of their investment.
“It is important to underscore this point. Dividends are distributions of earnings to shareholders. Dividends whether cash dividends or share dividends also known as bonus shares, belong to the shareholders and not to the company who distributed them or neither to the government. Therefore, every effort must be made to ensure that the shareholders gets their dividends from their hard-earned investment.
“Nevertheless, we must also be interested in knowing what happens to the dividends money when they remain unclaimed. You may recall that the Securities and Exchange Commission (SEC) had attempted to address this issue in 2006 when it sponsored a bill to establish the Unclaimed Dividends Trust Fund (UDTF). The National Assembly however did not pass the bill following opposition from body of shareholders”, Ibrahim stated.
In his presentation, Director General of SEC, Lamido Yuguda said about N29 billion of unclaimed dividends have been claimed by investors through the introduction of regularisation of multiple accounts.
SEC introduced the regularisation of multiple accounts in 2015 where it requests all shareholders with multiple accounts to harmonise their accounts by filing e-dividend mandate forms and submitting same to their banks or stock brokers for onward transmission to their respective registrars.

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

%d bloggers like this: