The Securities and Exchange Commission (SEC) has advised all ‘fictitious investors’ in the country to come forward and claim their shares/dividends, as well as regularise their holdings latest by September 30th. The Commission’s resolution to extend the deadline marked the highlight of the Capital Market Committee’s meeting over the weekend.
While speaking to journalists at the end of the meeting, SEC’s Acting Managing Director, Ms Mary Uduk stated that the Commission decided to extend the deadline by six more months in order to enable every ‘fictitious investor’ to claim their shares. She also noted that previous deadlines to this effect are yielding results, as more investors are coming forward to claim their shares.
She, however, admitted that the process has also been fraught with challenges. This, she said, was why the Capital Market Committee’s deliberations at the meeting also recommended the appropriate technical committee for registrars in a bid to work together and resolve said challenges.
We encourage all affected investors to come forward and take advantage of the window before the new deadline. -Uduk said.
All affected persons are expected to provide evidence of ownership of and claim their shares and dividends on or before the given deadline, or otherwise forfeit their shares and dividends to the Nigerian Capital Market Development Fund.
Note that the Securities Exchange Commission has in the past issued several deadlines to this effect, with the most recent deadline being March 31st, 2018.
Who are the ‘fictitious investors’?
Fictitious investors are shareholders with multiple subscriptions to IPOs. According to SEC, these investors adopted several covert means while acquiring their shares in a desperate bid to beat the standard limits that are standard during every Initial Public Offering; including limits on age and number of applications. To beat these limits, the ‘fictitious investors’ used fake names, among other illegal means.
This fraudulent practice was most common during the boom period (i.e., between 2005 and 2008) when the Nigerian capital market saw a sharp increase in the number of companies being listed on the Nigerian Stock Exchange, especially financial institutions.
About ₦45 billion in dividends are currently unclaimed.
Note that measures are being put in place to prosecute any investor who engages in this fraudulent practice henceforth.
The Securities and Exchange Commission in 2015 launched the free e-dividend f registration in a bid to ensure that shareholders get their dividends easily. Unfortunately, many investors have failed to take advantage of the platform. This has caused the regulatory agency to extend the deadline thrice now; first until December 31st, 2017, and most recently, April 2018.
So far, only about 3 million investors have registered for their e-dividend.
The Securities and Exchange Commission is an agency with the primary mandate of examining the applications of companies seeking to raise capital from the capital market. The agency has been in existence since 1962.