Unclaimed dividend: SEC explains continued increase

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SEC hierarchy, discussing unclaimed dividend

THE Securities and Exchange Commission (SEC) has explained the reason behind the continued increase of unclaimed dividend, which stood at N158.44 billion as of December 2019.

According the News Agency of Nigeria (NAN), reports from SEC show that the figure is still rising in spite of e-dividend registration introduced by the Commission in 2015.

Unclaimed dividend is recorded when a shareholder fails to claim an already paid dividend after six months.

A breakdown of the components shows that unclaimed dividends with companies (15 months and above) stood at N119.01 billion.

Unclaimed dividends with registrars amounted to N14.64 billion and unclaimed dividends less than 15 months old stood at N24.77 billion.

The, SEC Head, Office of the Chief Economist, Mr Okey Umeano, attributed the pile of unclaimed dividend to large number of unclaimed shares.

Umeano said,”the main issue why unclaimed dividend is rising is because we have a large number of unclaimed shares.”

According to him, many investors bought shares with different names, during the banking consolidation and they were yet to rectify those names. 

He said that the commission introduced a forbearance window for multiple accounts to enable investors that bought shares with different names to regularise their accounts in order to reduce the quantum of unclaimed dividends.

According to him, “many people have still not been able to claim their own because some of them have forgotten the names they used.

“Some have not been able to prove to their stockbrokers that they are the owners of the shares.

“So, we still have a large chunk of those shares, and anytime dividends are paid, those shares are not claimed and those people don’t get their dividends.”

He said that over N100 billion out of the unclaimed dividend figures were from those unclaimed shares.

“Until we bring down that number of unclaimed shares, this unclaimed dividend problem will continue,” Umeano said.

He said SEC would continue to pressure the people involved in order to curb the problem of unclaimed dividends, while he 

called on investors to prove ownership of their shares.

“SEC has given them amnesty to go and claim their shares and as people are claiming those shares, unclaimed dividends number will go down,” he said.

An investor and Managing Director, Lancelot Ventures Limited, Mr Adebayo Adeleke, said more efforts were on to ensure that source documents for share transactions contain bank details of investors.

He believes that the hike in unclaimed dividends might be because of the recent listings of highly capitalised stocks such as MTNN, Airtel Africa , BUA Cement, among others, which may have pushed the figures upward.

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