SEC moves to reduce N190b unclaimed dividends

The Securities and Exchange Commission (SEC) has unveiled plans to create a new e-dividend portal that would help simplify the process of mandating accounts in the capital market.

Besides, the commission also explained that processes put in place to entrench trust in the Collective Investment Scheme (CIS) has increased the fund under management from N1 trillion in 2020 to N2 trillion in 2023.

Indeed, the figure rose to N190 billion in August 2023 from N180 billion as at December 2021 and N170 billion in 2020. The apex capital market regulator has put several measures in place to eradicate the difficulties encountered by retail investors in claiming their dividends through their savings accounts, especially the introduction of the e-Dividend Management Mandate System (e-DMMS).

The initiative, which was rolled out in 2015, is an electronic dividend payment platform that enables an investor’s account to be credited after 24 hours the dividend is paid.

Also, SEC had recently inaugurated the e-dividend champions for banks and registrars at its Lagos Zonal office. The champions would have the responsibility of forwarding all shareholders’ complaints on registration to the Nigerian Interbank Settlement System (NIBSS) to give clarifications on the issues within three days.

Rising unclaimed dividend figures have been linked to a lack of awareness, forgotten investments, multiple subscriptions, and inaccurate and outdated information/identity management necessitating the commission to deploy measures to check the trend.

At the SEC Journalists’ training held in Lagos, yesterday, the Director-General of the Commission, Lamido Yuguda, said SEC was poised to tackle the perennial problems of unclaimed dividends.

According to him, the portal, which is expected to become operational by the end of the month, would enhance efficiency and ultimately lead to a significant fall in unclaimed dividends.

He said: “In furtherance of its efforts to ensure that new dividends do not become unclaimed, the commission is presently supporting work on an identity management system that would ensure that investors and market participants are properly identified so as to forestall the problems that led to accumulation of unclaimed dividends.”

Yuguda noted that efforts by the commission to manage risk and entrench trust in CIS by ensuring that all CIS funds be held in custody has helped the growth of these funds from about N1.1 trillion at the beginning of 2020 to about N2.1 trillion at the end of October 2023.

He urged investors, especially those at the retail end, to approach the market through these CIS funds, as they provide investors with the opportunity to have their investments managed by knowledgeable investment professionals.

According to Yuguda, the commission embarked on an amendment of the Investments and Securities Act (2007) with the Investments and Securities Bill (2023) currently at the National Assembly.

He appealed for speedy passage of the Bill to enable the commission to position the market better for the economic growth, as well as strengthen its ability to carry out its mandate with enabling laws that support its activities.

MEANWHILE, following an offer from its core shareholder, Titan Trust Bank Limited to acquire the shares of all minority shareholders, Union Bank of Nigeria (UBN) yesterday announced plans to delist from the Nigeria Exchange Limited (NGX) at a scheme consideration of N7.70 kobo per share for shareholders.

The announcement is coming few weeks after one of the consumer goods manufacturing giants, PZ Cussons Nigeria, rated 36th most valuable stock on the NGX with a market capitalisation of N75.8 billion, with about 0.203 per cent of the Nigerian equities market announced plans to acquire shares held by other shareholders of PZ Cussons Nigeria Plc (PZCN) and subsequently delist from the exchange.

The bank, with a market capitalisation of N194 billion, said it is currently finalising the process of obtaining approval to delist its shares from NGX, upon which shareholders of the bank will receive a Scheme Consideration of N7.70 per share.

It noted that the acquisition of the minority shareholding has led to the application to delist Union Bank of Nigeria Plc from the Nigeria Stock Market.

The development was implemented by way of a scheme of arrangement between the bank and the bank’s shareholders (the minority shareholders), by Section 715 of the Companies and Allied Matters Act 2020 (as amended).

Chief Executive Officer of the bank, Mudassir Amray, said: “This move is an effort to attract larger private investments to reconsolidate our position as one of the top pioneer banks in Nigeria.”

Reacting on the development, President of NewDimension Shareholders of Nigeria, Patrick Ajudua, said: “The delisting of Union Bank from the stock exchange after 52 years of listing is of great concern to us as shareholders of the bank.

“We call on the regulator to ensure that the interest of minority shareholders is well protected in determination of exit price as that will assuage the pain of shareholders post delisting. Effort must also be made to address factors responsible for delisting of companies from stock exchange as this is becoming an issue of great concern to shareholders.”

Culled from The Guardian