The Securities and Exchange Commission has called on the state governments to take advantage of the enormous opportunities available in the capital market to revitalise moribund companies in their state in a bid to create wealth for the citizens.
Acting Director General, SEC, Ms. Mary Uduk, said this recently in Akure, Ondo State, at an e-dividend enlightenment campaign.
Uduk, represented by the Head, Zonal Offices Coordinating Department, Mr. Edward Okolo, said some of the companies still had potential, adding that the capital market had instruments to revamp such companies through private equity funding and partnerships to create investors’ confidence.
The Acting DG also urged investors to take advantage of the ongoing e-dividend registration, as well as the regularisation of multiple subscription accounts, in a bid to reduce the unclaimed dividends profile and increase liquidity in the capital market and the economy.
She disclosed that the forbearance window for shareholders with multiple subscriptions had been extended by another year, from the December 31, 2018 deadline previously communicated.
Consequently, she enjoined those who had not come forward for the regularisation of shares purchased with multiple identities, to
do so.
She said, “The essence of the e-Dividend Mandate Management System is to eradicate or reduce, to the barest minimum, the incidence of unclaimed dividend. Unclaimed dividend is an undesirable feature of the Nigerian capital market, which denies investors/shareholders the gains of participating in the capital market. It denies the economy access to the huge amount of money, which should have accrued to shareholders and would have gone into circulation to oil the wheels of the economy.
“It is a consequence of the bottlenecks, which are inherent in the erstwhile paper dividend warrant regime, such as postal system inefficiency, change in investors’ addresses, poor fidelity and human fallibility in dividend payment processes, amongst others.”
She added that the E–Dividend regime bypassed these limitations by ensuring that dividends, which did not exceed 12 years of issue were credited directly to investors’ accounts after declaration by the paying company and within a stipulated payment period through simple interbank transfer.
In his paper, the Head, Lagos Zonal office, SEC, Mr. Stephen Falomo, said, over the years, the quantum of unclaimed dividends, within the Nigerian capital market, had witnessed tremendous growth. As at January, 2018, the total amount was confirmed to be over
N100billion.
“Companies will continue to declare dividends; this figure is expected to further grow. The huge figure and continuous growth of unclaimed dividends clearly suggest an urgent need to stem the trend,”
he said.
Falomo said the way out was for Nigerian investors to enroll for the e-dividend regime by completing an e-Dividend ‘Mandate Form’ and submitting same at the nearest branch of their bank or Registrar’s office, for identity validation, leveraging the BVN platform of the
NIBSS.
