Shareholders Urge SEC to Overhaul Unclaimed Dividend Process in Nigerian Banks

Shareholders in Nigeria are pressing the Securities and Exchange Commission (SEC), registrars, and stockbrokers to reform the process for claiming unclaimed dividends, which they say is hindered by administrative delays and complex procedures. The issue has gained increasing attention as the number of unclaimed dividends from banks and corporations continues to rise. Investors have expressed frustration over the difficulty of accessing their funds, urging for a more transparent and accessible system.

A key factor behind the surge in unclaimed dividends is a range of challenges, according to Mrs. Bisi Bakare, National Coordinator of the Pragmatic Shareholders Association. These challenges include the use of fictitious names during privatization, outdated shareholder records due to relocations, and the lack of proper estate planning by deceased shareholders. Additionally, many shareholders fail to claim dividends due to low payouts or the difficulty in reconciling multiple accounts under different names.

Mrs. Bakare stressed the importance of electronic dividend registration and the regular updating of shareholder information to reduce the backlog of unclaimed dividends. She argued that these efforts could significantly ease the process, making it more efficient for shareholders to claim their funds. Her call for reform also highlighted the need for a coordinated approach to addressing these systemic issues in Nigeria’s capital market.

Mr. Moses Igbrude, National Coordinator of the Independent Shareholders Association of Nigeria, echoed similar concerns, emphasizing that even newly listed companies on the Nigerian Exchange Group (NGX) continue to face challenges with unclaimed dividends. Igbrude criticized the SEC’s dividend trust fund initiative, proposing a multi-pronged strategy that involves collaboration among registrars, stockbrokers, corporate executives, and shareholder associations to address these issues effectively. He also called for a simplified process to transfer shares from deceased individuals to their rightful heirs, eliminating bureaucratic delays.

In response, SEC Director-General Dr. Emomotimi Agama highlighted the role of digital transformation in resolving the issues surrounding unclaimed dividends. Agama pointed out that by digitizing the capital market and ensuring accurate identity verification, the problems related to unclaimed dividends could be mitigated. Stakeholders remain hopeful that ongoing reforms will lead to a more streamlined and efficient process, ensuring investors can access their dividends without unnecessary delays.

Source: Nairametrics