Jun 29, 2010 By Patience SAGHANA
Shareholders of quoted insurance companies in the country are panting for a plow back of unclaimed dividends as they drum for investment relation officers in those companies to keep watch on investment of unclaimed dividends.
The problem of unclaimed dividends in the nation’s capital market has not only persisted but has also generated passionate controversies that drew the concerns of all stakeholders including regulators.The percentage of unclaimed dividend among quoted insurance companies range from 20 percent to 40 percent and in some cases more than. Thus, when dividends are declared but not paid on time or at all, the investor is the loser.
This is why shareholders are appealing to insurance companies to plow back unclaimed dividends into the companies until the owners come forth to claim it.They rather preferred that the unclaimed dividends be plowed back to the companies than have government take investors’ monies under any disguise.
Mr Godwin Anono, chairman, Nigerian Professional Shareholders Association said at the 15th annual general meeting of Custodian and Allied Insurance Plc in Lagos last weekend that shareholders will kick against the Bill wanting to allow government take over management of unclaimed dividends. “We will not allow it; I hope I am speaking the mind of shareholders”, other shareholders chorused, “yes”.
Mr Nona Awo, another shareholder at the meeting, said instead of fighting against the Bill, what can be done is that companies should begin to set up investor relationship desk that would partner with Registrars to answer people’s questions. “People need to be guided so that these claims can be made. I believe with this, much would be achieved in reducing the volume of unclaimed dividends”.Other shareholder who corroborated are Mr S. S. Adebayo Mr Fidelis Soares and Mrs Funke Augustin.
Financial Vanguard investigations traced the huge unclaimed dividends to lack of notification of change of address by investors to the registrar; Death of shareholders and lack of necessary follow_ups by deceased families; Small values of some dividends leading to non_presentation of warrants by shareholders when collected; Ignorance of what to do with a dividend warrant and rejection by banks to accept payment of dividend warrants into savings account.
Others are: Closure of bank account without notifying registrars in case of mandate dividends; Investors supplying inadequate information during the floatation of an initial public offer; Change of ownership of post office box without notifying the registrar. Shareholders have persistently opposed to the establishment of Unclaimed Dividend Trust Fund (UDTF), proposed to address the growing rate of unclaimed dividend presently estimated to be N17.9 billion.
In 2006, the National Assembly threw out a proposed bill sponsored by the Securities and Exchange Commission (SEC) to establish the Unclaimed Dividend Trust Fund (UDTF).