What The Government Should Do With N75bn In Unclaimed Dividends
Nairametrics| At a hearing by the House Of Representatives, DG of the Securities and Exchange Commission (SEC), Munir Gwarzo said that the agency had been able to reduce unclaimed dividend from N117bn to N75bn in 2016. While this is commendable, more can be done.
SEC, in collaboration with the Nigerian Stock Exchange (NSE) can go further and provide a list of companies with unclaimed dividends and how much they are worth.
Registrars should also be encouraged to post the list of shareholders with unclaimed dividends on their website, since they are custodians of the funds. Electronic dividend forms need to be made compulsory for all investors in the stock market.
Government must pay closer attention to both registrars and the shareholders who got their dividends. Did the recipients of the unclaimed dividends pay the required taxes ? Are the registrars prudently managing the funds ? Can the funds be better utilized ?
The concept around unclaimed dividends also needs to change. Since the amount is not left idle but invested by the custodians, investors should also be given some of the returns made from unclaimed dividends. Unclaimed dividends belongs to someone who will one day lay claim to their assets. As such, any reward accruable to their assets through capital gains must be passed on to the owners or their successors.
The government should also use the funds to invest in critical sectors of the economy such as housing through securitized asset backed schemes.
Unclaimed Dividends is a creation of a failed stock market, where investors are rewarded with pennies for being ordinary shareholders of badly managed companies in Nigeria. Society shouldn’t be made to suffer further by allowing these same companies to benefit from their failings.