Senate, SEC, others brainstorm to checkmate unclaimed dividends

The Senate Panel on Capital Market, the Securities and Exchange Commission (SEC), and stakeholders in the capital market have promised to work together to resolve the recurring issue of unclaimed dividends in the country.

The agreement came at a one-day public hearing organised by the Senate panel to find a lasting solution to the issue.

Apart from suggesting a further amendment to the Finance Act, shareholders at the forum reiterated the need for proper sensitisation about the activities of SEC.

They also urged the SEC to deploy modern technology to identify owners of the unclaimed dividends and come up with comprehensive data.

The participants agreed that the Director General of the SEC, Dr. Emomotimi Agama, should within the next six months forward to the Senate panel necessary strategies on how to reclaim unclaimed dividends in the Debt Management Office (DMO).

The DMO, according to the stakeholders, had no business keeping 10 percent of the fund, as currently empowered by the Finance Act.

Declaring the event open, the President of the Senate, Godswill Akpabio, said the forum was organised to identify the root causes of unclaimed dividend funds and to chart a path forward that would empower investors, protect their interests, and unleash the full potential of the capital market.

The Chairman of the committee, Osita Izunaso, said critical legislation was necessary to instil confidence in the capital market.

He said, “The most important thing is, what are the major takeaways of this summit? Somebody said here, and I concur with that person completely, that the capital market is something that involves trust.

“Once that trust is eroded, people will not want to invest again. And you know, since the crash of the capital market since 2018, a lot of people still don’t have confidence in the capital market. So it is our responsibility, it is our collective responsibility to make sure that this confidence is built back. Whether you are a stakeholder, whether you are in the parliament, whether you are a shareholder, whoever you are, make sure that this confidence comes back.

“The declared dividend alone for five years is five trillion. So which means it’s an average of one trillion a year. So you can say that it is N1 trillion annually. So if the dividend alone can be 1 trillion, then the stock market is not doing badly. But you can see that if it is promoted further, we’re going to make more money from that exercise.”

He, therefore, challenged the SEC DG to redouble his efforts to identify owners of unclaimed dividends through massive enlightenment activities.
Izunaso said, “A lot is on your shoulder because you are the main regulator. Now, there is a need to strengthen the Know Your Customer (KYC) requirements. I’ve said it here. It’s very key. Once you strengthen the KYC requirements, some of these issues would have been taken care of. You should simplify the process of account update.

“ This is for the bank. Let the process be simplified. The shareholder’s representative that spoke was talking about their website where all these things will be there. Once you go to that website, you will see everything. I don’t know whether there is such a website in existence.

“If there is, please make sure that the public knows about it. If there’s none, let there be one. So that all these stories will not come up again. They will just go to the website, and you see everything there.

“Now, we need to also address the inadequacies in the financial institutions’ infrastructure. The DG talked about leveraging technology. That is key. That is the major key. We as the National Assembly have a role to play, and we know our roles. Our roles are very clear. There is a need to amend the Finance Act. You can’t lump up all these things together. There is a need to separate it. The CBN will not have a role to play with the matter of accounts, while the SEC and other institutions will have a role for the unclaimed dividends. So I think we should amend the Finance Act. And in any case, I don’t just subscribe to the fact that the Minister of Finance should be the chairman of any such institution. He is too busy to chair it. And we don’t even know whether it will properly constitute it.”