The Securities and Exchange Commission has been urged to improve the record-keeping process for shareholders in order to ease the claims of dividends.
This comes as the SEC continues to address the issue of unclaimed dividends, which currently stand at N215bn.
Speaking in an interview with our correspondent on Tuesday, the National Coordinator of the Pragmatic Shareholders Association of Nigeria, Bisi Bakare, stated that despite improvements in the process of claiming dividends, particularly with the introduction of the e-dividend system, there are still challenges that need urgent attention.
According to Bakare, one of the major reasons for the high amount of unclaimed dividends is the difficulty faced by the families of deceased shareholders in locating the necessary documents to claim their dividends.
He further pointed out that some families are unaware that their loved ones owned shares in certain companies, preventing them from claiming the dividends.
Bakare also noted that during privatization, some shareholders purchased shares under different names, which has created challenges in retrieving records.
This lack of proper documentation and the inability to recall the names or addresses used for purchases have contributed to the large backlog of unclaimed dividends.
“Late shareholders that their families are finding it very difficult to get what registrars are demanding from them to claim the dividend. Secondly, many shareholders are late and their families are not aware that they have shares in those companies. Nobody will claim the dividends till eternity,” she said.
She emphasized that the SEC should review the minimum number of shares that shareholders can purchase through the secondary market.
Under the 1999 Companies and Allied Matters Act, shareholders can become members of a company with just one share, a situation that has seen some individuals buy only a single share for the purpose of attending meetings rather than receiving dividends.
Bakare also called on registrars to make the process of claiming unclaimed dividends more flexible and accessible to shareholders, urging the need for a more efficient and coordinated system.
“Furthermore, the SEC needs to review the minimum of shares shareholders can purchase through the secondary market as it applies to Initial Public Offer.
“The 1999 CAMA stipulates that with one unit you can be a member of the company, for that, some shareholders purchased one unit for them to attend meetings, but they are not really after the dividend. Lastly, the registrars should make the claiming of the unclaimed dividend more flexible to shareholders,” Bakare added.
In a related development, a minority shareholder Ariyo Olugbosun raised concerns over issues he has faced while attempting to claim dividends.
Olugbosun recounted how his e-mandate was disregarded by registrars due to discrepancies in signature records from his secondary market purchase. He criticized the lack of coordination between registrars, claiming that such inefficiencies erode trust in the market.
“I have faced issues claiming dividends from Atlas. Despite having an e-mandate, it was disregarded because my signature could not be verified due to my secondary market purchase. Registrars must collaborate and cross-check their databases, as a shareholder experiencing challenges with one registrar may have smooth transactions with another,” he said.
Olugbosun also mentioned difficulties surrounding the management of the estates of deceased shareholders, highlighting the costly and cumbersome processes involved. He stressed that the SEC must hold registrars accountable for these issues, as most of the problems stem from their lack of diligence in record-keeping and verification.
Despite these challenges, Olugbosun suggested that unclaimed dividends could be redirected to benefit the issuing companies, promoting business growth and expansion. He further advocated for better collaboration between registrars to ensure smoother dividend claims for shareholders.
“I strongly advocate for unclaimed dividends to be utilized to benefit the issuing company, fostering business growth and expansion opportunities,” Olugbosun noted.
In August The PUNCH reported that the Securities and Exchange Commission has reiterated its commitment to resolving the lingering issue of unclaimed dividends, which currently stands at N215bn, through the deployment of advanced technology solutions and improved stakeholder engagement.
