NSE unclaimed dividends hit N129bn

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Despite the e-dividend registration campaign embarked on by the Securities and Exchange Commission (SEC) for nearly two years, the number of unclaimed dividends in the country has steadily been on the increase.

Data from the SEC’s statistical bulletin show that the number rose from N84.3 billion in December 2012 to N129 billion in December 2017. The free registration began in 2015 and was extended to April 2018.

Dividends are returns paid to shareholders of a company out of profits made by the company. They are paid periodically upon recommendation by the board of directors.

Unclaimed dividends are those that have not been claimed by investors after six months. Under current rules, all dividend payments are to be made through electronic means.

National Daily gathered that unclaimed dividends with companies amounted to N99.3 billion. The ones with registrars amounted to N15 billion, while those less than 15 months old amounted to N15.2 billion.

Though the unclaimed dividends increased as a whole, dividends less than 15 months old have steadily decreased. From a peak of N82 billion in December 2012, they have steadily declined to N15 billion as of December 2017.

However, the portion of dividends held by the companies has been on a steady increase. From N2.3 billion in September 2012, it hit an all-time high of N99.3 billion as of December 2017.  Investors that fail to claim their dividends after 12 years, forfeit them to the companies.

For retail investors, some of the dividends involved are so miniscule, compared to the effort required to register for the electronic dividends.

Shareholders with signatures that don’t tally with records held by the registrars have to get bankers confirmation letters.

Many of the investors are also aged, and in some cases, deceased without wills.

Last year, the SEC unveiled plans to establish an Unclaimed Dividends Trust Fund (UDTF). The fund will be managed by an asset manager, and have a board of trustees that will be overseen by the commission.

 

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