SEC Orders Companies to Release Long-Unclaimed Dividends, Enforces Finance Act 2020

The Securities and Exchange Commission (SEC) has issued a firm directive to public companies and their registrars, instructing them to stop denying shareholders access to dividends that have remained unclaimed for over 12 years. This move addresses widespread concerns that many firms have wrongly classified such dividends as statute-barred, especially those declared prior to the Finance Act of 2020.

In a circular released on Tuesday, the SEC emphasized that dividends which were still within the statutory claim period as of December 31, 2020—the date the Finance Act came into force—must still be paid out to rightful shareholders. The Commission clarified that the Finance Act overrides the previous 12-year limitation often cited by companies to block dividend claims.

Referring specifically to Section 60 of the Finance Act, the SEC explained that unclaimed dividends older than six years are to be transferred to the Unclaimed Funds Trust Fund (UFTF). However, until the UFTF is fully established and functioning, companies must not withhold these dividends and are expected to honour payment requests from shareholders.

The SEC further invoked Sections 3(4)(e) and 93 of the Investments and Securities Act 2025, reinforcing its authority to mandate compliance. It stressed that companies cannot hide behind pending structures of the UFTF to deny shareholders their entitlements, and must act in good faith until government processes are completed.

Lastly, the Commission instructed all affected companies and registrars to comply immediately and begin submitting regular reports in line with SEC regulations. This directive is part of broader efforts to restore investor confidence and ensure transparency and accountability in Nigeria’s capital markets.

Source: Punch