The Executive Director, Market Operation and Technology of the Nigerian Stock Exchange (NSE), Mr. Adeolu Bajomo, has said the exchange is working on a strategy that would help to address the issue of unclaimed dividends in the Nigerian capital market.
Unclaimed dividends in the market are said to be over N52 billion and rising by the day. However, Bajomo disclosed in Abuja last Friday that NSE is working with the Central Securities Clearing System Plc (CSCS) tackle the challenge.
Bajomo, who spoke at the 2012 Securities and Exchange Commission (SEC) Journalists' Academy, said the exchange would soon roll out a minimum registration requirement that will make electronic (e)-dividend payment mandatory for all participants in the market.
Although he did not give details of the strategy, he explained that anybody entering the market would be made to fill a form that would include bank account details to facilitate e-dividend payment going forward.
According to him, "the exchange wants to move away from paper dividend. Under the minimum requirement investors must submit their account numbers for onward payment of dividends."
Speaking on the rising level of unclaimed dividends, Director, Legal Services and Secretary to the SEC, Mr. Edosa Aigbekaen, attributed to multiple applications for shares by investors in the past, change in addresses without notifying registrars and inefficient postal system among others.
He, however, advised shareholders to embrace e-dividends as one of the ways out. He also called for the revisiting of the proposed Unclaimed Dividend Trust Fund (UDTF).
Aigbekaen said that the UDTF Bill that was thrown out by the National Assembly, should be revisited, noting that once it is into law, investors could get their dividends at any given time.
He explained that currently, investors could not have access to the dividends after 12 years, stressing that once declared, the dividends were debt owed investors.
Aigbekaen therefore, called for the amendment of the Companies and Allied Matters Act (CAMA) which says that unclaimed dividends would be reverted to companies after 12 years.
A legal practitioner and former member of the Investments and Securities Tribunal (IST), Mr. Sola Ephraim-Oluwanuga, also supported the establishment of UDTF.
He noted that the proceeds from the fund could be invested in the critical areas of the economy, declaring that "the money does not belong to the companies and not meant to go to the treasury but intended to be distinct and away from government coffers," he said.