The N90 billion still in the SEC vaults reflects technology lag
With about N90billion as unclaimed dividends, we support the sensitisation walk organised by the Securities and Exchange Commission (SEC), to encourage investors on the need to key into the e-platform created for the purpose of enabling them claim their dividends electronically. Addressing journalists at a function in Abuja, the Head Marketing Development, SEC, Mr. Henry Adekunle Rowland, who made the disclosure, put it succintly: the essence of the sensitisation walk was “to encourage investors to provide the necessary information so they could be able to claim their dividends electronically”. According to him “e-dividend means electronic dividend and dividend is the profit which an investor gets from the company which he has invested his money”.
We join the SEC in imploring investors to go and register on the platform in order to collect their dividends electronically in their preferred banks. Investors are expected to go to their banks to fill a form which will contain certain information, account numbers (whether saving or current), their passport photographs, and Bank Verification Number (BVN). Not only that, Central Securities Clearing System (CSCS) number will be required “if you are already de-materialised”, but if you are not, “you will go with your share certificate number after which you will be validated using Nigerian Inter-Bank Settlement System (NIBSS) portal where the e-dividend form is actually located”.
It is only after a successful validation that the completed forms would be sent to the registrars of companies who would then consolidate all the investors’ dividends before commencing payments. According to Rowland, “the objective of this initiative is to make sure that the N90bn unclaimed dividends are depleted within the next six months after the completion of this exercise”.
Dividend warrants (DWs) are investors’ entitlements, so it is only fair that they reap the fruits of their labour. But, because DWs are usually sent by post, they sometimes do not get to their owners, or get to them late. Apart from this, some investors would have changed their addresses so that when the DWs got to their former residences, the people there may not know their new residential addresses. The same is true for those using post office boxes. In some cases, these are changed or closed as a result of transfers or inability to pay the rent.
In both cases, DWs are lost while in some cases postmasters may use their discretion by sending unclaimed dividends back to the companies. Sometimes too, the amount involved may be so small that investors simply put aside such dividend warrants which they do not think is worth the trouble of going to the banks to lodge.
It is good that the SEC realised some of these challenges and therefore came up with the e-platform last year. However, the commission should do more by way of engagement and also simplify the cumbersome procedure for e-payment of dividend warrants. As it is now, it is very likely that many of the unclaimed dividends would remain unclaimed as many investors may not be disposed to the cumbersome procedures listed by SEC before an individual investor could claim his unclaimed dividends.
The apathy that investors showed on their unclaimed dividends, which led to the whopping N90bn of unclaimed dividends, may not abate with the present procedures. Also, the idea of setting six months deadline for the cumbersome exercise is not necessary or helpful for, under the prevailing conditions and general apathy of investors concerning unclaimed dividends, it is unlikely that even 50 percent of the N90bn unclaimed dividends would have been fully claimed at the end of the day.
The commission should do more by way of public enlightenment to make investors aware of the e-platform, especially as not many investors are aware of its existence as of today. If this succeeds or is made to succeed, it would be to the interest of investors. With the e-platform it would no longer be the business of an investor to take DWs to the bank as the warrants are automatically sent to an investor’s bank account once he keys into the platform.
