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Business

Reps raise alarm over N200 billion unclaimed dividends in 2020

The House of Representatives has expressed concern over close to N200 million unclaimed dividends in the capital market.

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Reps raise alarm over N200 billion unclaimed dividends in 2020, the Capital market, Lamido Yuguda assumes duty as new DG of Security and Exchange Commission

The House Committee on Capital Markets and Institutions has raised alarm over the growing unclaimed dividends in the capital market, projected to cross the N200 billion mark at the close of 2020.

This projection was made by the Chairman of the House of Representatives Committee on Capital Markets and Institutions, Babangida Ibrahim, during an investigative public hearing on the “Need to Investigate the Rising Value of Unclaimed Dividends, Unremitted Withholding Tax on Dividends and their Attendant Effects on Nation’s Economy,” which held at the National Assembly Complex, Abuja.

READ: Senate to review 2013 power privatisation, questions FG’s funding

According to a news report by NAN, he explained that the projection was not in the best interest of the market as well as market participants, since the problem of huge accumulated unclaimed dividends was a major challenge to the development of the Nigerian Capital market, as it had lingered for so long despite the best efforts of market regulators.

In his statement at the investigative public hearing, he said that in 1999, the value of unclaimed dividends was N2.09 billion, and by 2017 it had risen to N100 billion. In 2018, the value was N120 billion, but at the close of 2019, it had risen to N158.44 billion.

READ: SEC extends deadline for filing quarterly financial statement due on October 30, 2020

Rep. Babangida Ibrahim disclosed that the problem of the huge volume of unclaimed dividends could adversely affect investor confidence, decrease the availability of long-term capital for economic development, and likely trigger volatility in the regulation of the capital market.

What you should know

Recall that the Securities and Exchange Commission (SEC) had attempted to address the issue in 2006, when it sponsored a bill to establish the Unclaimed Dividends Trust Fund (UDTF), but the National Assembly at the time had not passed the bill because of opposition from the body of shareholders.

READ: Fears over ₦100 billion unclaimed dividends as e-dividend registration ends

The Director-General of SEC at the investigative public hearing, Mr Lamido Yuguda, said about N29 billion of unclaimed dividends were, however, claimed by investors through the introduction of regularization of multiple accounts.

He said SEC introduced the regularization of multiple accounts in 2015, where it requested all shareholders with multiple accounts to harmonize them by filling e-dividend mandate forms.

READ: Nigerian Senate to review investment laws in supporting Nigeria’s capital market

According to him, the commission had begun mulling an initiative, to ensure consolidation of multiple accounts which involved the verification and isolation of the account beneficiaries, with a deadline of the first quarter of 2021, as the commission seeks to bring to an end the issue of unclaimed dividends.

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What they are saying

Speaking on the steps taken by SEC to improve the efficiency of dividend payment, the DG of SEC, Mr Lamido Yuguda said:

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“Some of these initiatives are the creation of a rule requiring Registrars to make electronic payments of dividends directly into shareholders’ accounts, and engagement with the probate registry to improve the process of obtaining and administering probate.

READ: SEC moves against ‘huge quantum’ of unclaimed dividends

“All these initiatives are aimed at improving the efficiency of dividend payments, reduce the quantum of unclaimed dividends and, as a consequence, grow and sustain the confidence of existing and potential investors,”

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Rep. Babangida Ibrahim said: “We are aware of measures that have been taken by the capital market regulator in the past to address the problem, but we can all see that the problem remains. In fact, the situation is worsening by the day.

READ: Leaked email reveal a bank can’t pay GDR dividend due to dollar shortages

“Some of the measures include e-dividend, dematerialization of share certificates, publication of names of owners of unclaimed dividends, among others. All these measures are very commendable, especially the fact that they are primarily aimed at ensuring that the shareholders, who are owners of the dividends, get the benefits of their investments.”

He added: “Dividends are distributions of earnings to shareholders, whether cash dividends or share dividends, also known as bonus shares, belongs to the shareholders and not to the company who distributed them or to the government. Therefore, every effort must be made to ensure that the shareholders gets their dividends from their hard-earned investment.”

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Omokolade Ajayi is a graduate of Economics, and a certificate holder of the CFA Institute’s Investment Foundation Program. He is a business analyst, and equity market researcher, with wealth of experience as a retail investor. He is a business owner and a stern advocate of Financial literacy, who believes in the huge economic prospect of the Nigerian Payment channels and Fintech space.

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Business

Conoil’s 30,000 bpd facility forced to shut down by host community

Conoil Producing Limited has had its crude oil production flow station at Ango field Bayelsa that it is operating shut down.

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Conoil Plc releases FY financial result for 2019, profit up by 11% 

Indigenous oil exploration and production company, Conoil Producing Limited, has had a crude oil production flow station at Ango field in Koluama, Southern Ijaw Local Government Area of Bayelsa State shut down by the host community.

This follows the protest by aggrieved members of the community over the oil firm’s insensitivity to its social obligations towards the people.

According to a report from the News Agency of Nigeria (NAN), the protesting members of the community had besieged the facility and told the oil workers to shut the facility and leave the site of the 30,000 barrels per day capacity flow station.

The oil workers at the onshore facility connecting oil wells within the swamps and creeks at Koluama were escorted out of the area by speedboats by armed security men.

What a community leader in Koluama is saying

A community leader in Koluama 1, Chief Young Fabby, on Tuesday, said that the facility was shut to protest the oil firm’s insensitivity to its social obligations to the people.

He said the aggrieved community shut operations at the flow station on Monday and sacked oil workers deployed to run the oil facility following Conoil’s failure to renew the Memorandum of Understanding (MOU) which expired in 2020.

Chief Fabby said, “The Koluama clan was compelled to take the action following the refusal of the oil company to dialogue on several outstanding issues amongst which is the MoU which expired for more than one year.

“All entreaties through established channels have been rebuffed. Secretary of Koluama kingdom Oil/Gas Committee, Jonathan Amabebe, had drawn attention to the refusal of Conoil and this is regrettable,” he said.

Although officials of Conoil have yet to react to the incident, the Commandant of Nigeria Security and Civil Defence Corps (NSCDC) in the state, Mrs Christiana Abiakam-Omanu, confirmed the development.

She said that members of Conoil’s host communities were at the oilfield to protest, but that only the operator of the field (Conoil) could confirm if it was shut or not.

What you should know

  • Conflicts between the oil-producing communities in the Niger Delta region of the country and the oil-producing firms have become quite regular and is a huge challenge to uninterrupted oil production in that area.
  • The complaints by the host communities against these oil firms include environmental degradation, incessant oil spillages, neglect of their corporate social responsibilities and so on.
  • This has often led to disruption/ stoppage of operations, closure of flow stations and rigs, vandalism/destruction of facilities, molestation/abduction of oil company staffs, temporary seizure of oil company assets like vehicles and boats and so on.

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Business

AFEX Commodities Exchange announces the listing of cashew on its trading platform

AFEX’s addition of cashew is to diversify investment options available on its exchange.

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AFEX to partner with FMDQ and Dubai Commodities Exchange, 50,000 farmers to benefit from AFEX Commodities agric funding initiative

AFEX Commodities Exchange Limited has announced the listing of Cashew on its platform, in a bid to diversify available investment options and create more wealth.

This is according to a disclosure issued by AFEX today and seen by Nairametrics.

According to the notice, the addition will help to expand the list of existing commodities available at the exchange which include;

  • Maize
  • Sorghum
  • Soybean
  • Paddy Rice
  • Cocoa
  • Ginger
  •  Sesame

In addition, the Exchange notified the investing public that the new commodity will be made available on the exchange’s trading platform, ComX.

Why it matters

AFEX Commodities Exchange in the recent disclosure rationalized the need to list cashew on its platform. It hinged this on the lucrative nature of the commodity, noting that it has a lot of untapped potentials.

According to the disclosure, cashew exports in Nigeria are highly profitable, with a yearly export volume of over $167 million, and untapped yearly potential of over $115.8 million. Therefore, listing the commodity on the AFEX Exchange provides opportunities for investors to gain exposure to the commodity and maximize their returns on investment.

What you should know

  • AFEX Commodities Exchange had earlier announced the issuance of its debut Warehouse Receipt Backed Commercial Paper- The first of its kind in Africa.
  • AFEX Commodities Exchange is Nigeria’s first licensed private commodities exchange established in 2014. It provides a final resting place for commodities using a three pronged approach of production region, logistics differential and final commodity price.
  • ComX is the proprietary trading platform of AFEX. It serves as a market for investors, financiers as well as other market participants.
  • AFEX Commodities Exchange posted a turnover of N11.46 billion for Q4 2020, indicating an increase of 5,228.4% QoQ.

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