ASDHN Rejects FG’s Plan to Manage N200Bn Unclaimed Dividends

Association of Securities Dealing Houses of Nigeria (ASDHN) has rejected plans by the Federal Government of Nigeria to manage unclaimed dividends – which is projected to hit N200bn by the end of this year.

Onyenwechukwu Ezeagu, chairman of the association who kicked against the move, explained that capital market regulators and operators had leveraged technology to put in place many initiatives to address the issue of unclaimed dividends.

Some of these initiatives, according to him, include de-materialization of shares, which entails upload of quoted companies share in the Central Securities Clearing System (CSCS) for ease of reconciliation, adoption of e-dividend and e-mandate, consolidation of multiple accounts, identity management engagements, and introduction of electronic Initial Public Offering.

“Generally, the incentives for savers and capital providers in the capital market is the expectation of dividends and capital appreciation,” Ezeagu said.

“It is, therefore, our considered view that the proposed legislation, if passed, will be a great disincentive to savings, long-term capital mobilization, and serious disruption of the Nigerian economy, since it will take away the only expectation of investors in the market.”

Similarly,  Mr. Olatunde Amolegbe, president, Chartered Institute of Stockbrokers, said the Securities and Exchange Commission would always ensure the transfer of unclaimed dividends to the capital reserves of the company for restricted utilization, such as capital expansion and issuance of bonus shares to the company’s shareholders.