SEC Worried As More Investors Abandon Dividends

By Tosin Olatokunbo

The Securities and Exchange Commission, SEC says it’s worried over the rate of unclaimed dividend in the capital market. The commission has therefore appealed to investors to do everything on their part to claim their dividends.

The commission made the appeal after reports that the federal government is planning to borrow the unclaimed dividends to fund selected infrastructure in the country.

The 2020 Finance Act empowers the federal government to borrow a certain percentage from unclaimed dividends which owners have not claimed for at least six years.

But the civil society have kicked against the plan, insisting that the owners of such dividend will be robbed of their investments and made poorer.

For instance, SERAP a civil society has sued the federal government over the plan to tap into unclaimed dividends for developmental purposes.

The value of unclaimed dividends, the magazine learnt has risen to close to N 1 trillion in the last few years.

According to a statement by the Commission in Abuja on Sunday, Lamido Yuguda, the Director-General of SEC, expressed regret over abandoned dividends when Prof. Kabiru Bala, Vice-Chancellor of Ahmadu Bello University (ABU) Zaria paid him a visit.

Yuguda said “People have not come forward to claim their dividends and this has led to huge unclaimed dividends.

“The Commission has been educating and enlightening the public on how they can get their dividends. People do not need to wait for the broker to send the dividend warrants through the registrars.

“The dividends can be paid directly into their bank accounts through e-dividend payments,’’ he said.

The Companies and Allied Matters Act provides that unclaimed after 12 years should be included in the profits that should be distributed to the other shareholders of the company.

In a suit filed against the federal government in March 14, 2021, Socio-Economic Rights and Accountability Project, SERAP the group urged a Federal High Court in Abuja to restrain and stop President Muhammadu Buhari and the Federal Government from borrowing about N895 billion of Nigerians’ money in the form of their unclaimed dividends and balances in dormant accounts.

SERAP described the Finance Act which gave the government such powers unlawful, unconstitutional and discriminatory.

In the suit number FHC/ABJ/CS/31/2021, SERAP prayed for, “An order of perpetual injunction restraining and stopping President Buhari from demanding, taking over, borrowing, and collecting Nigerians’ money in the form of their unclaimed dividends and funds in dormant accounts or transferring and moving the money into a trust fund known as ‘Unclaimed Funds Trust Fund.’

“The Federal Government should not be allowed to borrow Nigerians’ money. Borrowing unclaimed dividends and funds in dormant accounts owned by ordinary Nigerians would negatively affect their right to an adequate standard of living, and access to clean water, quality healthcare and education,” SERAP said.