By Gbenga Agbana

Tuesday, 2 Nov 2010

To reduce the incidence of unclaimed dividends in the capital market, some shareholders have advised the government to extend the expiry date of dividend warrants.

Hitherto, dividend warrants expired six months after the issuance date, after which it must be revalidated by registrars of the issuing companies.

Worried by the volume of the unclaimed dividends of quoted companies, which runs into billions of naira, members of the Nigeria Shareholders Solidarity Association, on Monday, urged the Federal Government to extend the expiry date of dividend warrants from six months to 18 months.

Speaking with our correspondent on Monday, the President, NSSA, Chief Timothy Adesiyan, said what constituted the volume of unclaimed dividends was beyond the control of shareholders, adding that the government needed to intervene to solve the problem.

According to him, “The first thing to do is to extend the lifespan of dividend warrants from six months to about 18 months. There are issues with the post office, distance from the registrars’ offices, among other issues. Sometimes, before the dividend warrants get to shareholders, the validity date must have passed, so there would be need to revalidate them.

“If somebody receives his dividend warrant and it is already invalid, the cost of revalidating it may be more than the dividend, so people may ignore the warrants and the volume of unclaimed dividend increases. If the government gives some grace to shareholders and makes a pronouncement that anybody holding dividend warrants that are not statute barred could pay them in to their bank accounts, the level of unclaimed dividends would be reduced.”

He said creating a fund with the title, “Unclaimed dividend trust fund”, not favour investors.

According to him, dividends that are unclaimed should remain with the companies, so that whenever investors want their money, they can claim it.

“The House of Representatives should know that most of the owners of unclaimed dividends are alive and the problem has to do with change of address, the post offices and other problems associated with the circulation of the warrants,” he added.

Source: Punch