More shareholders have kicked against the plan by the Securities and Exchange Commission (SEC) to suspend the issuance of dividend warrants if they fail to  embrace electronic dividend after June 3, 2013.

SEC had in an advertorial expressed dismay at the unprecedented increase in the size of unclaimed dividends in the capital market and requested all investors/shareholders of public companies to forward their bank account details to their respective registrars/stockbrokers on or before June 3, 2013 to facilitate the electronic payment of future dividends.

“Failure to do so may amount to the automatic forfeiture of future dividends as dividends warrants would cease to exist from June 3, 2013 except in the event that a shareholder specifically request in writing for the continued issuance of dividend warrants.

“The commission is confident that the introduction of the e-dividend payment system would reduce to the barest minimum the accumulation of unclaimed dividends in the financial system and ensure that shareholders receive their dividends promptly, thereby improving confidence in the capital market,” SEC said.

But some shareholders said the move by SEC was like putting the cart before the horse, saying before coming out with a deadline, there should be enough enlightenment.

The Chairman of Ibadan Zone Shareholders Association, Chief Sola Abodurin, said:  “While it is good for investors to embrace e-dividend, they should be given more time and SEC should embark on adequate enlightenment before making any move to stop dividend warrants.”

According to him, the commission should not only  ask investors to comply with e-dividend directive but should also work the Central Bank of Nigeria to prevail on banks to reduce their charges on banker’s confirmation and other  dividend verification related issues.

Speaking in the same vein, a founding member of Nigeria Shareholders Solidarity Association (NSSA),Alhaji  Gbadebo Olatokunbo, said SEC did not have the power to  change the rule.

“You cannot change the rule while the game is on. If they want shareholders to embrace e-dividend, the commission should do more in terms of  investor  enlightenment and prevail on registrars to do their own beat. Most times when shareholders give e-dividend mandates to registrars, they do not carry out such mandates. Therefore, SEC should embark on enlightenment and ensure that registrars perform their statutory roles before coming out with this kind of directive,” he said.

Olatokunbo  noted  SEC did not mean what it is saying (stoppage of dividend warrants),adding that  the commission was only trying to encourage more investors to embrace e-dividend.

“SEC cannot take away from me my rights as an investor. The dividend is my right and nobody invested the money for me and as such nobody can take away my rights,” he declared.

The   National Coordinator, Independent Shareholders Association of Nigeria, Sunny Nwosu, had  said the move by SEC, rather than correct the situation, might cause more panic in the market.

According to him, there should have been various collaborations with major stakeholders before such a decision was reached.

“We do not believe that the action of SEC in this regard is in the right direction because it seems the commission is not taking the plight of investors into consideration before coming up with such a decision. We, therefore, appeal to companies in their own interest not to encourage such a move, because SEC does not have the right to cancel the warrants of investors. I think that the National Assembly should look into the issue critically, else, these companies will be facing a lot of litigation in the months to come,” he said.

Source: Thisday (by Goddy Egene)