The Securities and Exchange Commission (SEC) has blamed investors for the increase in the total unclaimed dividends in the Nigerian capital market, Naija247news reports.
The Director-General of SEC, Mr Lamido Yuguda, speaking at the second post-Capital Market Committee (CMC) virtual news conference last week, lamented the 7.3 per cent or N11.56 billion rise in unclaimed dividends to N170 billion as of December 2020 from N158.44 billion as of December 2019.
He attributed the rising figure to identity management and multiple subscriptions of investors, asking why investors would purchase stocks with fake names.
“We have problems with identity management in the Nigerian capital market and this is really one of the things the commission is trying to resolve.
“We have set up a high powered committee to look at the issue, people bought shares under false names and multiple subscriptions.
“There is a problem with the process but there is a problem with us too as people because if you are buying securities using your own wealth?; why will you use another person’s name?; why will you use a name that will not be traceable to you?” he asked.
“This became an issue after the introduction of BVN because BVN is tied to only one name,” Mr Yuguda quipped, noting that the agency constituted a committee on identity management for the Nigerian capital market in June in order to address the unclaimed dividend issue.
“The committee is chaired by Mr Aigboje Aig-Imoukhuede and is expected to harmonise various databases of investors and facilitate data accuracy in the market.
“We are optimistic that the outcome of this committee’s assignment would address the challenges of identity management and help resolve some of the issues we face in the areas of unclaimed dividend, direct cash settlement and multiple subscriptions,” he added.
On the Electronic Dividend Mandate Management System portal, the SEC helmsman said the total number of mandated and approved accounts from its inception in 2016 to July 2021 stood at 1,144,970.
Mr Yuguda said members of the CMC had adopted some measures to increase the number of mandated investors on e-DMMS and reduce the quantum of unclaimed dividends in the market as the COVID-19 pandemic affected the registration exercise.
He listed the measures as automation for mandating to e-DMMS, increased monitoring of adherence to procedures and increased awareness campaigns on the initiative.
Mr Yuguda added that a training session would be organised by the Central Securities Clearing System (CSCS) to be supported by the e-DMMS technical committee, Institute of Capital Market Registrars and Association of Securities Dealing Houses of Nigeria.
He said a study to determine the suitability of the CSCS to process dividends of investors in unlisted companies would also be conducted.