Nigerian banks frustrating investors’ bid to collect N90 billion dividend backlog

Nigerian banks are frustrating efforts by the Securities and
Exchange Commission, SEC, to get investors in the country’s
capital market to embrace the e-dividend policy, a senior official of
SEC said Monday.
The electronic registration is expected to help investors receive
from the banks unclaimed dividends from their investments in
stock and equities in the capital market valued at over N90 billion.
A senior official of SEC, who requested anonymity to discuss the
issue, told PREMIUM TIMES at the launch of the second phase of its
investors’ sensitization campaign in Lagos, that some banks were
deliberately frustrating the exercise launched last December to
ensure that unclaimed dividends were paid to investors.
At the launch of the campaign, investors were given 30 days to
migrate to the e-dividend platform free of any charge.
The official revealed that monitoring reports on the exercise
showed that some banks were charging their customers as much
as between N1, 050 and N2, 000 before stamping and signing the
e-dividend registration forms.
This charge is contrary to commission’s directive that investors’
migration to the new e-dividend platform be free throughout the
period of the sensitization campaign.
The official said an official report on the development has already
been lodged with the Central Bank of Nigeria (CBN) during a
meeting of the heads of banking operations, supervisors and
registrars of banks last week.
The meeting was attended by representatives of the CBN, SEC,
Nigerian Inter-Bank Settlement System (NIBSS), Committee of
Heads of Bank Operations and Institute of Capital Market Registrars
(ICMR).
The SEC official also confirmed that the CBN had assured that the
matter would be tabled before the next Bankers’ Committee
meeting to compel the affected banks to retrace their steps and
comply with the free registration directive.
The official, who did not name the banks involved, lamented that
their activities were posing serious threat to the capital market
regulator’s effort to ensure that the issue of unclaimed dividends
was finally resolved and the monies paid to their rightful owners.
To ensure that the process was cleared of all “unscrupulous
activities of banks”, the official announced the immediate extension
of the free registration period by another 30 days.
The period, which was expected to close by March ending, would
continue till the end of April 2016.
A spokesperson for SEC, Naif Abdulsalami, declined to comment
on the claim.
Unclaimed dividends
A minimum of N90 billion unclaimed dividends is being kept in
various bank accounts belonging to quoted companies in the
market.
The amount, which ordinarily should have been paid to the
investors, had continued to sit in the various banks for various
reasons, including claims of wrong investors’ personal
information and postal addresses.
“The Companies and Allied Matters Act (CAMA) stipulates that 15
months after the annual general meeting where those dividends
were declared, if they are not redeemed by the investor, such
unclaimed dividends must revert to the paying companies,” the
official explained.
Curiously, some of the registrars belonging mostly to the banks
have continued to keep the monies beyond the stipulated period
and using them to do businesses that yield huge interests.
The commission has said that no fewer than 1,500 complaints
have been received from various investors over unclaimed
dividends, non-issuance of investment certificates and other
infractions.
The introduction of e-dividend platform would guarantee prompt
and direct remittance of declared dividends by quoted companies
into the accounts of registered investors, while allowing investors
to sell off part or all their shares any time they wished without fear
of their pay being delayed for weeks and months.
The e-dividend registration sensitization campaign began in
January 2016 in Abuja with road-shows and a town hall meeting
to educate investors on the benefits of the exercise.
The second phase of the campaign began on Monday in Lagos.

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