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Tag: unclaimed dividends

  • Special units to tackle N215bn unclaimed dividends –SEC boss

    Special units to tackle N215bn unclaimed dividends –SEC boss

    Barring any last minute hitch, the monster of unclaimed dividends will be tackled outright with the establishment of special units, the Director-General of the Securities and Exchange Commission, Emomotimi Agama has said.

    Agama gave this hint during the Capital Market Committee meeting in Lagos last Thursday.

    The SEC boss who restated the Commission’s resolve towards addressing the lingering issue of unclaimed dividends, which currently stands at N215bn, through the deployment of advanced technology solutions and improved stakeholder engagement, lamented that the mounting unclaimed dividends and outlined measures being taken by the commission to reduce this backlog.

    “As of March, the unclaimed dividend was N215bn. We recognise the concerns of investors regarding unclaimed dividends, and as a regulatory body, we are committed to ensuring that the issue is addressed. Through the introduction of a self-service portal and an upcoming mobile app, investors will have real-time access to their dividends and be able to resolve challenges more efficiently.

    “We are working closely with registrars and financial institutions to streamline dividend payouts. Our goal is to ensure that investors who are rightfully entitled to their dividends can claim them without unnecessary delays,” Agama stated.

    The SEC DG also announced the establishment of a specialised committee to oversee the resolution of unclaimed dividends and ensure compliance among market operators.

    According to Agama, this committee will focus on identifying and addressing the root causes of the delays while recommending strategies for more effective management in the future.

    “We are working on a podcast to enable the younger generation to access and understand the capital market. We will also employ the use of educational apps, and we will go to the NYSC camp to speak with the younger generation about what the market is about,” he stated.

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    The SEC DG reiterated the commission’s determination to encourage more companies to list on Nigerian exchanges, in line with the Federal Government’s $1tn economy target.

    Agama also revealed strides in the Nigerian capital market for 2024, highlighted by the approval of nine new issuances worth N1.228tn.

    “In the Nigerian capital market for 2024, the commission has so far approved nine new issuances, totalling N1.228tn, reflecting increased confidence in the market. In the fund management space, the net asset value of registered mutual funds grew by 111.08 per cent to N3.335tn, indicating strong and sustainable growth,” he explained.

    Echoing similar sentiments, the Executive Commissioner of Corporate Services, SEC, Samiya Usman, said the Commission remains dedicated to enhancing the operations of investors in the capital market.

    “We want the regulation to be better and we will try to make it better for our investors,” she said.

  • Unclaimed dividends hit N130b

    Unclaimed dividends have risen to its highest level of N129.62 billion.  Shareholders have alleged deliberate efforts by registrars and company secretaries to frustrate the recovery of the unclaimed dividends and payment of new ones.

    Latest update on unclaimed dividends by the Securities and Exchange Commission (SEC) showed that unclaimed dividends had risen to N129.62 billion by last December 31.

    The report indicated that about a quarter of the unclaimed dividends were with registrars while the balance were with companies.

    SEC in November 2015 launched the E-Dividend Mandate Management System (E-DMMS) in collaboration with the Central Bank of Nigeria, Nigerian Interbank Settlement System (NIBSS) and other stakeholders. The E-DMMS is an E-dividend payment portal that ensures the payment of dividends directly into a shareholder’s account.

    After about three years of campaign for e-dividend, SEC cancelled the issuance of physical dividend warrants, opting for full e-dividend payment for companies quoted on the stock market.

    Shareholders, who spoke to The Nation at the weekend, alleged that the rate of adoption of the e-dividend and recovery on unclaimed dividends had been slowed down by bureaucratic bottlenecks and deliberate sabotage by some stakeholders, especially registrars and company secretaries.

    Shareholders, who spoke under the condition of anonymity for fears of victimisation, said companies and registrars were unwilling to release the huge funds under their custody and had been employing delay tactics to frustrate shareholders from adoption of e-dividend.

    According to the shareholders, company secretaries and registrars have perfected the tactics of selective payment and distribution of e-dividend while exploring loopholes in the rules and enforcement by SEC.

    “Before you can open a shareholding account, you must necessarily fill Know-Your Customer (KYC) form that contains all your details, including bank account and official identity. You will also be required to sign your signature, provide utility bill, photocopies of identity card and many other requirements. But even after this process and your account is opened at the Central Securities Clearing System (CSCS), the registrars will still claim you don’t have specimen signature and all sorts of that,” a shareholders’ leader said.

    According to them, with the shareholders’Bank Verification Number (BVN) that are registered with stockbrokers, registrars should be able to process e-dividend and make payment on the basis of confirmation by stockbrokers, who are the custodians of shareholders’ accounts.

    They noted that the CSCS used a similar method to attain 100 per cent dematerialisation of share certificates, alleging that registrars and company secretaries are undermining the dividend payment process because “money is involved”.

    They urged SEC to review the e-dividend process and work with stockbrokers to achieve seamless transition to full e-dividend payment.

    “When you sell your shares through stockbrokers, you get your money, why is it that it is only when it comes to dividend payment that bureaucracy comes in and you are being tossed from one end to another? It is deliberate. They know what they are doing,” another shareholders’ leader lamented.

  • Investors to lose N45b unclaimed dividends, shares

    Investors to lose N45b unclaimed dividends, shares

    About N45 billion unclaimed dividends and millions of shares may be forfeited by investors who used fictitious names and other secret means to buy shares through public offers.

    The 2005-2008 boom in the capital market witnessed significant increase in public offers as several banks, insurance companies and other non-financial quoted and unquoted companies jostled to raise funds through the capital market.

    Securities and Exchange Commission (SEC) confirmed that  to beat limits that were essentially features of public offers, including age, some applications and allocations, several subscribers used fictitious names and various forms  to push through multiple allocations.

    Reliable industry sources at the weekend told The Nation that about N45 billion, or nearly three-quarter of the outstanding unclaimed dividends, and millions of shares belong to such fictitious investors.

    An investment advisor and strategist with a leading investment firm, who requested for anonymity because of the sensitivity of the issue, said the issue of fictitious investors, otherwise known as ghost investors, is one of the sore points of the market carried over from the boom-burst period of the market.

    “It’s really a major issue and we reckon that most of the unclaimed dividends and shares belong to such ghost investors. The decision to address the issue by the Capital Market Committee (CMC) will put one of the vestiges of the ugly past behind the market,” the investment advisor said.

    A source at SEC said the Commission is determined to enforce the deadline September 1, 2017 imposed by the CMC for claimants to provide verifiable evidence and identifications to proof ownership of such unclaimed dividends and shares, after which such unclaimed dividends and shares will be forfeited to the proposed Nigerian Capital Market Development Fund.

    In a circular, SEC noted that stakeholders agreed to adopt a non-prosecutory approach to resolve the issue of multiple subscriptions, though the market also needs to ensure the balance not to be seen to be rewarding wrongful act and illegality of the perpetrators.

    SEC pointed out that a review by stakeholders shown that one major source of unclaimed dividend remains the use of non-existent identity to make multiple subscriptions to public offers.

    A report by an investigate committee set up by the CMC reported that there were two groups of investors involved in multiple subscriptions. The first, categorised as Group A, consisted of investors that joggled their names in different forms to enable them purchase more than the permitted units of shares on offer. The second, categorised as Group B, consisted of non-existent or ghost investors  who did not exist but used fictitious names for purchasing more than the permitted number of shares during public offers.

    While condemning the two groups for their fraudulent intentions and illegal actions, the CMC, however, approved that Group A should be considered for a level of forbearance by giving them a grace period up to September 1, 2017 within which to come forward and  prove their individual identities, subject to highest Know-Your-Customer criteria, to be defined by the SEC.

    Those owners, whose identities are established, would then be allowed to consolidate their accounts. After the expiration of the time, unclaimed dividends, traceable to this category that have not been identified and consolidated, along with their securities shall be transferred to the Nigerian Capital Market Development Fund to be managed in a separate basket under clear guidelines.

    Investors under Group A that cannot prove the ownership of their shares and the second group of investors, Group B, will forfeit the unclaimed dividends and related securities. Since these shares cannot be ascribed to anyone, both the unclaimed dividends and securities shall be transferred to the Nigerian Capital Market Development Fund.

    After the conclusion of this special resolution arrangement, anybody who engages in the wrongful act of multiple subscriptions for the same public offer shall be prosecuted while the market shall put in place adequate processes, leveraging on technology, towards detecting and identifying such cases of multiple subscriptions in the future.

  • SEC moves to clear N80b unclaimed dividends

    SEC moves to clear N80b unclaimed dividends

    The Securities and Exchange Commission (SEC) has said it is putting in place machinery to clear unclaimed dividends worth over N80 billion.

    Its Head, Corporate Communications, Naif Abdussalam, told The Nation that the capital market regulator would this week commence a road show to sensitise Nigerians on their rights to the unclaimed dividends and how to redeem them before holding a Town Hall meeting with stakeholders on the matter.

    The SEC, he said, has “directed all registrars of public companies to return all unclaimed dividends, which have been in their custody for 15 months and above, to the paying companies.”

    The SEC also notified the  public that enrolment for e-Dividend payments could now be efficiently conducted at bank and registrar branches nationwide through the online platform launched on July 29, last year.

    The e-Dividend scheme, Abdussalam said, “has been a priority initiative for the entire capital market in a bid to curb the growth of unclaimed dividends and improve the overall efficiency of Nigeria’s equities markets.”

    SEC advised all shareholders and investors in the capital market to approach their banks or registrars to complete the e-Dividend Mandate form for immediate processing and upload to the e-Dividend Mandate Management System (e-DMMS).

    This service, SEC said, is free for the first 90 days beginning from December 14, last year after which it will attract a fee of N100.

    To eradicate the difficulty encountered by retail investors in claiming their dividends through their savings account, SEC, in collaboration with the Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement System (NIBSS) in July, last year launched the e payment platform.

    Unveiling the platform, the Director-General of SEC, Mr. Mounir Gwarzo, said the platform would address the issue of unclaimed dividend in the market.

    According to him, the platform, which is part of the 10- year capital market master plan, would address the issues of non-payment of dividends into savings account.

    “The era of stale dividend and huge unclaimed dividend in the market will be a thing of the past with the launch of e-Dividend payment platform. The commission will conduct intensive training for bankers and registrars on the usage of the new portal,” Gwarzo said.

    He re-emphasised the determination of the commission to implement the capital market master plan, which he said would transform the market for the benefits of all stakeholders.

    The Commission followed this with a notice posted on its website, advising registrars to exercise caution while validating names generated by the system to avoid dissimilarity with the physical forms.

    He further explained that “all registrars’ offices/ accredited outlets shall be points of upload of completed e-Dividend Mandate forms by investors who may alternatively approach their banker to process their completed e-Dividend Mandate Form(s)’’.

    Explaining the modality for the use of the portal, SEC said: “Every registrar shall validate investor’s shareholder account number, name, signature and Clearing House Number (CHN); this shall be followed with upload of scanned copy of completed e-Dividend Mandate Form(s) on to the portal for immediate access by the investor’s nominated bank for the verification of his/her bank account details. Registrars shall exercise caution when validating names generated by the system for the clearing house number, shareholder account number and bank account number against the physical form to ensure there is a reasonable level of congruence before the document is accepted and saved on the portal.

    ‘The receiving bank may reject the mandate uploaded by presenting registrars if the signature on the mandate does not tally with the specimen signature of the account holder in the bank.”

    The Commission added: ‘Investors should be educated to complete separate forms for each shareholder account number, as upload of e-Dividend Mandate Forms shall be on the basis of individual shareholder number and company of investment indicated by the investor on the physical e-Dividend Mandate Form.

    ‘To mitigate errors in the treatment of e-Dividend Mandate Forms, Registrars shall institute a marker-checker system that enables the verification and upload of e-Dividend Mandate Form(s) by a Registrar Uploader subject to confirmation and approval by a Registrar Checker’

  • SEC to review N90b unclaimed dividends

    Securities and Exchange Commission (SEC) would review the procedures and structures for the management of unclaimed dividends as part of efforts to reduce the backlog of returned monies.

    Director General, Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, said the apex capital market regulator would take another look at the backlog of unclaimed dividends, which currently stand at around N90 billion.

    He said while the launching of the electronic dividend (e-dividend) would stem future accumulation of unclaimed dividends, the Commission would take measures to reduce the backlog of unclaimed dividends.

    SEC had recently directed registrars to immediately begin the implementation of e-dividend. In a circular to all registrars, the apex capital market regulator had stated that the e-dividend mandate management system (e-DMMS) portal was ready for use by all registrars and banks. The e-DMMS portal was launched July 29, 2015 by SEC, which subsequently coordinated trainings for officials of share registration companies.

    According to SEC, it is now mandatory for every registrar to immediately commence the use of the e-DMMS portal as directives will soon be issued to banks to discontinue the verification of paper mandates presented to bank branches.’