Key Highlights
- The growth of the company’s outstanding unclaimed dividend started getting higher in 2013 and has resulted in the company recording about N1.088 billion in the past 10 years.
- The Company in a notice to its shareholder said that some dividends have remained unclaimed as its Registrars’ records showed.
- Quarterly reports by the Securities and Exchange Commission (SEC) showed that the value of unclaimed dividends rose from N37 billion as of December 2010 to N180 billion at the end of 2021.
The unclaimed dividend by shareholders of Custodian and Allied Plc has risen to N1.179 billion over the last 14 years (since 2008).
This is contained in the company’s unclaimed divided table as at 31, December 2022 financial year obtained by Nairametrics.
The unclaimed dividend: A cursory look at the company’s audited financial statement released to the Nigerian Exchange Limited and the investment public showed that the outstanding unclaimed dividend represent about 4.98% of the total dividend of N23.683 billion declared by the group during the period under review.
Further check showed that despite market regulators and quoted companies have continued to urge investors in the capital market to register for e-dividend so that they can receive the benefits of their investments in the capital market, the growth of the company’s outstanding unclaimed dividends started getting higher from 2013 which resulted in the company recording about N1.088 billion in the past 10 years accounting for about 92.28% of the total unclaimed dividend.
Company’s advice to shareholders: The Company in a notice to its numerous shareholders has said that some dividends have remained unclaimed as its Registrars- Meristem Registrars & Probate Services Limited records showed.
- “A number of share certificates have also been returned as unclaimed because the addresses on them could not be traced or the shareholders have changed their addresses without informing the Registrars. The affected shareholders should please get in touch with Meristem Registrars & Probate Services Limited.
- The Registrars are e-dividend payment ready. Shareholders are kindly requested to take advantage of this, to reduce the incidences of unclaimed dividend. The unclaimed dividend list is on the Registrars website and copies are displayed at the venue of the AGM,” the company noted.
Reasons for the unclaimed dividend: Reasons responsible for the growth of unclaimed dividend include issues of shareholders, who have died and without information on next of kin, multiple applications by applicants during the investment process and deliberate actions to deny investors their benefits through various schemes by some registrars and companies who lack liquidity to pay.
The Managing Director, Crane Securities Limited, Mr. Mike Eze, while speaking to Nairametrics, traced the genesis of the rising wave of unclaimed dividend to indigenisation era of the administration of General Yakubu Gowon. He said:
- “During this exercise, those in position of authority who had the wherewithal acquired shares in the privatised companies with fictitious names of their drivers, cooks, gardeners, dead brothers, dead fathers etc in such a way that when the dividends came, they were not able to claim them why because there is no such persons to claim such.”
Speaking in the same vein, the Managing Director, Highcap Securities Limited, Mr. David Adnori, explained that unclaimed diviends were increasing every year due to several factors. According to him, the problem started several years ago during the indigenisation exercises when several shareholders made multiple subscriptions in fictitious names whose signatures they cannot remember.
He noted that the affected shareholders were also unable to open bank accounts in these fictitious names for the purpose of e-dividend collection.
He added that most of the unclaimed dividends were statute barred and forfeited to the companies in which case recovery by the affected shareholders may not be possible in the absence of means of identification.
What you should know: Quarterly reports by Securities and Exchange Commission (SEC) showed that the value of unclaimed dividends rose from N37 billion as of December 2010 to N180 billion at the end of 2021. This represents a 386.48% increase in the past 11 years despite measures put in place by the SEC to checkmate the rise.
This raises concerns that the value has continued to grow and serve little or no economic gain as some stock investors in the Nigerian capital market continue to leave their dividends untouched.
While shareholders have different reasons for not claiming their dividends including lack of information, multiple subscriptions, challenges in processing of the funds, forgotten investments, death or some other reasons, among others, it is important to sustain continuous financial literacy to help bring more funds to investors’ wallet and reduce the rising value of unclaimed dividend.
Market regulators have continued to urge urged investors in the capital market to register for e-dividend so that they can receive the benefits of their investments in the capital market.
Most unclaimed dividends are as a result of the wickedness of Registrars. I have experienced situations where existing payments to my Bank was stopped for years when I did not change bank, neither did i change my Bank. I currently have a situation where i surrendered my UNION BANK SHARES for Titan trust bank acquisition since last year. The Register acknowledge receipt of all details, I have written twice for my money to be paid but no response. Many Registrars actions is a disincentive to investment. I am about handing the matter to my solicitors for arbitration.