Poor records, deceased shareholders drive N215bn unclaimed dividend crisis

 

Unclaimed dividends, a persistent challenge in Nigeria’s capital market, have sparked frustration among shareholders. The issue remains unresolved despite the introduction of electronic systems and reforms by the Securities and Exchange Commission. TEMITOPE AINA addresses questions about systemic inefficiencies, lapses by registrars, and the impact of dead shareholders.

Introduction

The Nigerian capital market, which has long been considered a critical engine for economic growth, is now grappling with a significant crisis that has left investors in frustration and uncertainty. The unclaimed dividend crisis, which currently stands at a staggering N215bn, has raised questions about the effectiveness of the systems in place to manage shareholder dividends and the larger implications for investors, especially in terms of trust and confidence in the market.

n August, The PUNCH reported that the Securities and Exchange Commission had reiterated its commitment to resolving the lingering issue of unclaimed dividends through the deployment of advanced technology solutions and improved stakeholder engagement. The Director-General of the Securities and Exchange Commission, Emomotimi Agama, acknowledged the challenge posed by the mounting unclaimed dividends and vowed to reduce this backlog.

Despite the ongoing push for modernisation and improvements in the sector, such as the introduction of the electronic dividend (e-dividend) system by the Securities and Exchange Commission and other reforms, many investors still find themselves unable to claim their dividends. The reasons for this lingering issue are manifold, from registrars’ inefficiencies to shareholders’ inability to keep track of their investments, as well as the challenges posed by deceased investors’ estates.

The crisis has reached alarming proportions, with the figure for unclaimed dividends growing steadily each year. In the face of these setbacks, shareholders lament the systemic flaws, and questions are being raised about the role of registrars, the government, and market regulators in addressing this prevalent issue. The financial and psychological toll on investors is immense, and the lack of a clear and efficient mechanism for dividend payment only exacerbates the sense of alienation in the capital market. Read more