Peter OBIORA investadvocate

Lagos (INVESTADVOCATE)-Less than 30 percent (30%) investors in the Nigerian Capital Market (NCM) have accepted the electronic dividend payment system.

Bayo Olugbemi, Managing Director (MD) First Registrars Limited, a subsidiary of First Bank of Nigeria Plc, on Wednesday March 09 2010 made this affirmation at the Capital Market Correspondence Association of Nigeria (CAMCAN) monthly lecture held at the Stock Exchange House in Lagos Nigeria.

In the lecture titled “Relevance of Registrars Under the Electronic Transfer System” affirmed that investors have refused to totally accept the measure as a means of collecting dividends despite the efforts Capital Market Regulators have made to ensure this happens.

“I make bold to tell you that less than 30% of investors in the Nigerian Capital Market; even high networth and enlightened investors are still insisting on seeing their physical certificates or dividend warrants” he said.

Olugbemi affirmed that the reluctance of investors to fully embrace this system is the reason for the issue of unclaimed dividends in Nigeria’s Capital Market.

“It is important for more investors to accept the system; which would save them a lot of stress and avoid the incidence of return or missing dividend warrants” the Registrar said.

He further affirmed that the Unclaimed Dividend Trust Bill at the National Assembly was not being proposed with the interest of affected shareholders considered.

“We are saying that investors should say no to the appointees of unclaimed dividends proposed to make some people rich; these funds belong to the shareholders and not the unclaimed dividend appointees” he said.

As earlier reported by investadvocate, stakeholders put the total figure of unclaimed dividends to about N20 billion, this Olugbemi said is less than five percent of the total amount.

The issue of Unclaimed Dividend Trust Fund was first proposed in year 2006 under the Olusegun Obasanjo administration and was opposed by stakeholders in the Financial Market, following this development; the National Assembly had to dump the idea.

Earlier Sir Sunny Nwosu, Shareholder Leader and National Coordinator, Independent Shareholders Association of Nigeria (ISAN) had in late July 2010 reacted to this Bill as proposed by the National Assembly.

Nwosu had affirmed that what determines unclaimed is after 15 months (one year and three months) after which a company is entitled to take back the funds and keep for the investors. “In fact what determines unclaimed is that after 15 months, the company will take back the funds and put it in a save custody for the shareholders” he said.

The Shareholder Leader also confirmed to investadvocate of the existence of a law in Nigeria making dividends unclaimed until after 12 years.

Prior to this time, SEC had affirmed that unclaimed dividends was estimated to be N2.09 billion as at the third quarter (Q3) of 1999, and then the figure rose significantly over the years to about N17.9 billion as at December 2008.

Now unconfirmed Reports put the figure of Unclaimed Dividends in Nigeria to an estimated N20 billion.