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.  

What others say about : What The Government Should Do With  N75bn In Unclaimed Dividends ..


Abolarinwa Agbola

Onome, good write up but there are 3 things here… Like you said, the high level of unclaimed dividend is probably due to the lack of faith in the stock market which has led to people not even paying attention to their investments. I don’t believe that it is poorly managed companies that led to unclaimed dividends, because if you look at it from the side of the investor, if the company was poorly managed, then the company would not have paid dividend. Instead, it is more about the poor dividend payment system, which the e-dividend system will probably solve going forward. A requirement to provide BVN and Tax payer ID details on opening CSCS accounts may also help.

Secondly, I do not believe the government should be allowed free access to the unclaimed dividends. The current arrangement of transferring unclaimed dividend to custodians is fine. An unclaimed dividend fund can be created and given powers to invest in the same asset allocation strategy of retirement funds is less risky, will allow proper diversity and will at least preserve the funds against inflationary effect.

Government and its inefficiencies will just end up messing up the unclaimed dividends. We are always quick to give government power over all our resources and that’s why they are always inefficient, because they know that apart from your taxes, when you have nothing to do with your money, you would rush to give it to them when you have the chance

Bae

I totally agree with you Onome, the process is poorly managed and tedious. Today I went to my bank to submit my e-mandate and they clearly told me that they will forward this info to the registrers after putting it online in their system. They however told me to go to the registrer on my own that there are no guarantees and I aske my self, why this long process. These registrers are in different locations and it takes time to sort this out. This process should be simplified please

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