Nigeria: SEC hails Rep resolution to investigate N52 billion unclaimed dividend

The Securities and Exchange Commission (SEC) has commended the House of Representatives over its resolution mandating its House Committee on Capital Markets and Institutions to investigate the high volume of unclaimed dividends in quoted companies in Nigeria and report to the House within four (4) weeks.
The SEC also disclosed that the unclaimed dividend has risen to N52.2 billion from the N40 billion earlier stated.
In a statement, the Commission said, “The size of unclaimed dividends was N52.2 billion. Out of this figure, 84.7 per cent i.e. N42.5 billion was held by nine out of 23 registrars who submitted their returns.”
According to SEC, “ It was out of concern for this unfortunate situation in which return on shareholders’ investment by way of dividends is perennially locked in the unclaimed dividends saga that as far back as in 2002, the SEC sponsored a bill in the National Assembly for an act of parliament which will set up the “Unclaimed Dividend Trust Fund”.
It further declared that the  Fund and the Act of Parliament which set it up were intended to drastically reduce or completely eliminate the incidence of unclaimed dividend by providing alternative domicile for funds deriving from unclaimed dividends to what was stipulated in Section 382(1) of the Companies and Allied Matters Act that: “Where dividends are returned to the company unclaimed, the company shall send a list of the names of the persons entitled with the notice of the AGM to the members. After the expiration of three months of the notice mentioned in 382(1), the company may invest the unclaimed dividends in an investment outside the company. No interest shall accrue on the dividend against the company”.
“ If passed into law, the “Unclaimed Dividend Bill” would have removed the point of domicile for unclaimed dividends from their originating companies to another party managed Trust Fund and removed the incentive which feeds the collusion between certain players in the market to frustrate shareholder access to dividend accruals on their investment” the commission noted.
The SEC further noted that if diligently prosecuted, the investigation may well hold the key to unlocking the challenge posed to the Nigerian capital markets and investor public by this phenomenon which contributes to the erosion of confidence in the market by denying investors their rightful returns on investment.