By Jeph Ajobaju, Chief Copy Editor
Unclaimed dividends in the capital market rose 7 per cent from N158.44 billion in 2019 to N170 billion in December 2020, according to Security and Exchange Commission Director General Lamido Yuguda.
He attributed the rise to the use of Bank Verification Number (BVN) in identity management and exposure of fraudulent multiple subscriptions by investors.
“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,” Yuguda said.
“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?
“This became an issue after the introduction of BVN because BVN is tied to only one name.”
Yuguda noted that the SEC constituted a Committee on Identity Management for the Nigerian Capital Market in June to address unclaimed dividends.
The committee is chaired by Aigboje Aig-Imoukhuede and is expected to harmonise various databases of investors, and facilitate data accuracy in the market, Yuguda said, quoted by the News Agency of Nigeria (NAN), as reported by The PUNCH.
“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 subscription,” he added.
He disclosed that the total number of mandated and approved accounts from the inception of the Electronic Dividend Mandate Management System portal in July 2016 to July 2021 stood at 1,144,970.
The pandemic affected the registration exercise, he said, but added that CMC members have adopted measures to increase the number of mandated investors on e-DMMS and reduce unclaimed dividends.
The measures include automation for mandating to e-DMMS, increased monitoring of adherence to procedures, and increased awareness campaigns on the initiative.
Yuguda said a training session will be organised by the Central Securities Clearing System, supported by the e-DMMS technical committee, Institute of Capital Market Registrars, and Association of Securities Dealing Houses of Nigeria.
A study to determine the suitability of the CSCS to process dividends of investors in unlisted companies will also be conducted, according to him.