In Nigeria today, there are about N190 billion unclaimed dividends. There are many reasons why people left their dividends unclaimed. Maybe they moved and forgot to update their addresses with their investment companies. Maybe they inherited shares and didn’t know they were entitled to dividends. Maybe they simply lost track of their investments or some of them are dead.
Last week, Seyi Abiodun, a popular finance coach, made a post about unclaimed dividends, enlightening his followers on how to know if they have unclaimed dividends and hence how to claim them.
“You may have unclaimed dividends either from your personal investments, or from a parent, a grandparent, a spouse, or any other family member. Sometimes, I casually check the portal just in case my grandfather has shares hiding somewhere, you never know,” he said.
Abiodun’s post had garnered over 200 comments at the time of writing the article, with many saying they checked the portal and found out that they had unclaimed dividends.
For instance, one of his followers wrote: “Thank you… I found my name. I remember I invested in Transcorp in 2010 and just found my name. I downloaded the e-mandate form and it requires me to indicate the date I opened my bank account.”
Another person said: “I checked the list and my dad’s name is on it; he has a share with Dangote Flour Mill but unfortunately, he’s late. Please, how do I go about that? Thanks.”
Last week, the Securities and Exchange Commission said that the unclaimed dividends stood at N190 billion.
Many Nigerian companies pay dividends, some pay twice a year — interim (January-June) and yearly (January-December) dividends.
To reduce rising unclaimed dividends over the years, SEC, in collaboration with the Central Bank of Nigeria and the Nigerian Inter-Bank Settlement System, launched the Electronic Mandate Management System platform.
What are dividends and how are they paid?
A dividend is a company’s payment, based on profit, to the people (shareholders) who own stock in the company. A company’s board of directors determines the payable dividend per share, and when and how often dividend payments are made. This is done with the approval of the shareholders. Dividends can provide a stream of income, which can be especially valuable during inflationary periods. Cash dividends are paid to accounts registered when you buy the stock.
What are unclaimed dividends?
Unclaimed dividend is the dividend paid by the company but the shareholder has not yet taken or claimed it. Unclaimed dividends are either from personal investments, parents, grandparents, a spouse, or any other family member.
Steps to retrieve unclaimed dividends
First, visit the SEC website; www.sec.gov.ng/non-mandated/ and search for your name. Check for personal information. If you find your name, all the details you need will also be shown. The details include the company you have shares in, the units, the registrar and your account number.
Once you have confirmed an unclaimed dividend under your name, take note of your registrar’s name, the name of the company you have their share, and your investment account number. Download the e-mandate form.
Click on the link at the top of the SEC Portal and download your registrar’s e-mandate form. Send the e-mandate form to the registrar. Complete the form and send it to your local bank or your registrar’s office with a copy of your passport photo. Your bank or registrar verifies and processes the document, then completes the process and sends all your unclaimed dividends into your chosen bank account.
Stockbroker route: Another way to get unclaimed dividends is to open an account with any accredited stockbroker who will carry out the search and retrieval process.
The major cause of unclaimed dividends
Another factor causing the increase in unclaimed dividends is that some companies have changed their names and not all investors are aware of the name changes.
Reclaiming from companies that no longer exist, changed names or merged
Some companies go through mergers and acquisitions and have different names. The dividends from shares of such companies should be in the name of the new company.
What if you do not see your name on SEC list or see multiple names that are just like yours
If you are sure you bought shares but they are not on the list, it then means you need a stockbroker to help you with what is called ‘global search’. It requires you to open an account with the stockbroker. Upon the submission of the e-mandate form to the registrars, all other Know Your Customer details will be checked.
For similar names belonging to the same registrars, the address used for buying the shares will be the determining factor, according to Abiodun, who said it is best to contact your registrars to get details on it.
Getting the worth of the dividends
The website does not give details of the dividend amount; to get the amount, contact the company’s registrar. “Yes, if one of them is listed as Next of Kin, also a stockbroker can advise on the process,” Abiodun said, while answering a question on whether a family member can reclaim the dividends of a late person.
How do you get the details required by the e-mandate form?
The e-mandate form requires some personal details including the Clearing House Number and Account Opening Date.
You can either ask the registrars (visit your registrar’s website to get their number) or contact your bank for the details.
Getting a registered stockbroker
The Nigeria Exchange Limited (NGX) has a list of trading licence-holder firms that comply with minimum operating standards. Though they are listed by the NGX, the regulator does not guarantee 100 percent protection of your investment in the hands of the brokers.
Who keeps the unclaimed dividend?
When a shareholder for any reason does not claim a dividend, it gives rise to the issue of unclaimed dividends. The CAMA 1990 (revised 2020) refers to “unclaimed dividends” as dividends not claimed within six months after a declaration, and are returned to the company, from where the investors can make claims up till, but not later than 12 years. The Federal Government had proclaimed that any dividend not claimed after 12 years becomes statute-barred and will be forfeited.
As unclaimed dividends grow, the SEC has also ascertained the quantum of unclaimed dividends of publicly traded companies that fall within the categories eligible to be borrowed by the Federal Government through the Unclaimed Dividend Trust Fund, which is being managed by the SEC and the Debt Management Office.
According to the SEC, the 2021 Finance Act mandates that all unclaimed dividends between the ages of 6 and 12 years be transferred to the Unclaimed Funds Trust Fund established for the purpose of borrowing by the Federal Government to support the 2021 appropriation.
“Unclaimed dividends have gone into the Unclaimed Dividend Trust Fund and are now managed by the SEC and DMO. The SEC is no longer the only institution that has data on unclaimed dividends. It will remain there until the owners come forward to claim them. We still have cases of multiple subscriptions, but we are working very hard on solutions to tackle them, especially in the area of unclaimed dividends,” Lamido Yuguda, director-general of SEC, said.