SEC faults banks over N90bn unclaimed dividend backlog

Nigerian banks have been accused frustrating efforts by the Securities and Exchange Commission, SEC, to get investors in the country’s capital market to embrace the e-dividend policy, a senior official of SEC said.

The electronic registration is expected to help investors receive from the banks unclaimed dividends from their investments in stock and equities in the capital market valued at over N90 billion.

A senior official of SEC, who requested anonymity to discuss the issue, told PREMIUM TIMES at the launch of the second phase of its investors’ sensitization campaign in Lagos, that some banks were deliberately frustrating the exercise launched last December to ensure that unclaimed dividends were paid to investors.

At the launch of the campaign, investors were given 30 days to migrate to the e-dividend platform free of any charge.

The official revealed that monitoring reports on the exercise showed that some banks were charging their customers as much as between N1, 050 and N2, 000 before stamping and signing the e-dividend registration forms.

This charge is contrary to commission’s directive that investors’ migration to the new e-dividend platform be free throughout the period of the sensitization campaign.

The official said an official report on the development has already been lodged with the Central Bank of Nigeria (CBN) during a meeting of the heads of banking operations, supervisors and registrars of banks last week.

The meeting was attended by representatives of the CBN, SEC, Nigerian Inter-Bank Settlement System (NIBSS), Committee of Heads of Bank Operations and Institute of Capital Market Registrars (ICMR).

The SEC official also confirmed that the CBN had assured that the matter would be tabled before the next Bankers’ Committee meeting to compel the affected banks to retrace their steps and comply with the free registration directive.

The official, who did not name the banks involved, lamented that their activities were posing serious threat to the capital market regulator’s effort to ensure that the issue of unclaimed dividends was finally resolved and the monies paid to their rightful owners.

To ensure that the process was cleared of all “unscrupulous activities of banks”, the official announced the immediate extension of the free registration period by another 30 days.

The period, which was expected to close by March ending, would continue till the end of April 2016.

A spokesperson for SEC, Naif Abdulsalami, declined to comment on the claim. A minimum of N90 billion unclaimed dividends is being kept in various bank accounts belonging to quoted companies in the market.

The amount, which ordinarily should have been paid to the investors, had continued to sit in the various banks for various reasons, including claims of wrong investors’ personal information and postal addresses.

“The Companies and Allied Matters Act (CAMA) stipulates that 15 months after the annual general meeting where those dividends were declared, if they are not redeemed by the investor, such unclaimed dividends must revert to the paying companies,” the official explained.

Curiously, some of the registrars belonging mostly to the banks have continued to keep the monies beyond the stipulated period and using them to do businesses that yield huge interests.

The commission has said that no fewer than 1,500 complaints have been received from various investors over unclaimed dividends, non-issuance of investment certificates and other infractions.

The introduction of e-dividend platform would guarantee prompt and direct remittance of declared dividends by quoted companies into the accounts of registered investors, while allowing investors to sell off part or all their shares any time they wished without fear of their pay being delayed for weeks and months.

The e-dividend registration sensitization campaign began in January 2016 in Abuja with road-shows and a town hall meeting to educate investors on the benefits of the exercise.