By Onwe Wisdom
The Senate of the Federal Republic of Nigerian has stated that unclaimed dividends represent not just a financial loss, but a loss of trust in the capital market.
The Senate stated this today at the public hearing organized by the senate committee on capital markets when the Senate President, Sen. Godwin Obot Okpabia who was represented by Sen. Binos Dauda Yaroe, Adamawa senatorial district declared opened the public hearing.
Senate President Akpabio in his speech titled “BUILDING A PROSPEROUS AND RESILLIENT CAPITAL MARKET FOR NIGERIA’S FUTURE” says “unclaimed dividends represent not just a financial loss, but a loss of trust in our capital market.They represent missed opportunities, dreams deferred, and a stagnant economy. We cannot afford to let this continue. We must rise to the challenge, confront the complexities, and find bold solutions that will restore faith in our financial systems and empower our investors.
Describing the essence of the public hearing, he said is a momentous occasion, “we gather here today to confront the pressing issue of unclaimed dividend funds. This issue strikes at the very heart of our financial markets and the economic landscape of our great nation. It is a call to action, a call to reclaim what is rightfully ours, and a call to forge a stronger and more prosperous future for Nigeria.
“Today, we stand at a crossroad, where the choices we make will shape the destiny of our capital market and the future of our nation. We have witnessed the exponential growth of unclaimed dividends, a reflection of the systemic issues that have plagued our financial sector for far too long. It is time to break free from the shackles of the past and embrace a new era of transparency, efficiency, and accountability.
But let us not dwell on the problems alone. Let us also recognize the tremendous potential that lies within our grasp. Nigeria, endowed with vast resources and a resilient spirit, has the capacity to become a beacon of economic prosperity and opportunity.
have the power to transform our capital market into a vibrant hub of investment, innovation, and wealth creation.
Enjoining the participants, he said “let us listen, learn, and collaborate. We are here to engage in a dialogue that transcends political affiliations and personal interests. Our objective is clear: to understand the root causes of unclaimed dividend funds and to chart a path forward that will empower our investors, protect their interests, and unleash the full potential of our capital market.
In this pursuit, we are joined by esteemed stakeholders, including representatives from the Securities and Exchange Commission (SEC) and other financial institutions. Your presence here is a testament to your commitment to our nation’s progress and your belief in the transformative power of collaboration. Together, we can dismantle the barriers that hinder our capital market’s growth and create an environment where every Nigerian can thrive.
As we embark on this journey, let us remember that we are not alone. We are part of a larger movement, a movement of visionary leaders, dedicated professionals, and passionate individuals who share a common goal to build a prosperous Nigeria for generations to come.This public hearing is a platform for the exchange of ideas, the sharing of best practices, and the forging of partnerships that will drive meaningful change.
“I implore each and every one of you to seize this opportunity, to contribute your expertise, and to offer practical solutions that will propel us forward. Let us set aside our differences and unite in our shared vision for a capital market that is transparent, inclusive, and resilient.
Akpabio expresses optimistic, states “Together, we can rewrite the narrative of unclaimed dividends and create a future where every Nigerian investor reaps the rewards of his hard work and dedication.
Commending the committee chairman and members, Akpabio maintained that “It would be remiss if I fail to express my deepest gratitude to the Chairman of the Senate Committee on Capital Market and all committee members for their tireless efforts in organizing this hearing. Your dedication and commitment to our nation’s progress inspire all of us, charges all participants to approach today’s discussions with a spirit of optimism, determination, and commitment to the Nigerian dream. Let us be guided by the principles of transparency, accountability, and fairness as we navigate the complexities of unclaimed dividend funds. Together, let us build a capital market that is the envy of the world, a market that empowers our people, attracts foreign investment, and drives sustainable economic growth. With these profound sentiments, I declare this public hearing open”.
Similarly, the Chairman, Senate Committee on Capital Market, Sen. Osita Izunaso in his opening remark says the public hearing is meant to confront the pressing issue of unclaimed dividend funds, a challenge that significantly impacts our financial markets and the broader economy.
“This forum presents an invaluable opportunity for us to engage in productive dialogue and explore viable solutions. Let us seize this moment to exchange ideas that will pave the way for decisive actions.
Notes that the issue of unclaimed dividends persist due to several factors, including challenges in identity management within the capital market. multiple subscriptions and historical
inadequacies in capturing subscribers information during the era of paper dividend warrants.
“These longstanding issues have compounded the problem of unclaimed dividends. However, substantial efforts are underway to address these challenges through the adoption of electronic dividend payments.
The ongoing reforms of the electronic dividend portal, overseen by the electronic dividend mandate committee and NIBSS, aims to enhance its functionality and user-friendliness. The
objective is to significantly enhance the investor experience and reduce the incidence of unclaimed dividends.
“Despite these efforts. we continue to grapple with significant volumes of unclaimed dividends, even within companies like MTN Nigeria, which underwent a digital offering with
extensive documentation. This underscores the persistent nature of the issue across various sectors.
Looking ahead, creating and tightening “Know Your investors” (KYI) Requirements is crucial to ensuring comprehensive shareholder information at the point of investment.
“This measure is aimed at consigning unclaimed dividends to history in our market, fostering greater
transparency and investor trust.
Sen. Osita notes, “Under CAMA provisions, unclaimed dividends that remains unsettled for fifteen months after declaration are required to be returned to the issuing company, shareholders retain the right to claim these dividend within twelve years of declaration. After this period, unclaimed dividends are deemed statute -barred and forfeited by the shareholders.
Says “Today’s public hearing is dedicated to addressing critical issues surrounding unclaimed dividend funds in Nigeria’s capital market. We will deliberate on regulatory reforms aimed at enhancing transparency and efficiency in dividend payments, addressing the impact of multiple subscriptions on investor rights, and implementing measures to reduce unclaimed dividends. Our goal is to foster a robust investment environment that upholds investor confidence and market integrity.
“I anticipate insightful discussions that will guide us towards effective resolutions on unclaimed dividend funds and elicit further legislative interventions.
The Director General of Nigeria Securities and Exchange Commission, Emomotimi Agama identified multiple identities, lack of adequate information about shareholders, acquisition of shares under fictitious names, failure to notify registrars, alterations in shareholders’ addresses, and the demise of shareholders, absence of proactive follow-up by the families of deceased shareholders, non-presentation of dividend warrants for minimal amounts or lack of awareness on how to handle dividend warrants, diversion of dividend warrants by illicit entities, loss of dividend warrants, reluctance of heirs to accept payment of dividend warrants into a savings account, declaration of unfunded dividends by paying companies, piecemeal payment of dividends, and the utilization of in-house registrars by paying companies as the several factors for the prevalence of unclaimed dividends in the Nigerian capital market.
Chairman, Senate Committee on Capital Market, Senator Osita Izunaso, reveals the committee’s intention to segregate the accrued interest rate from dormant accounts to prevent the CBN from claiming dormant accounts, emphasizes the necessity to amend the Finance Act.
