The Securities and Exchange Commission (SEC) has been urged to probe the utilisation of unclaimed dividends by delisted companies and the final pay off of investors of such companies.
The call was made in a petition by the Issuers & Investors ADR Initiative (IIADRI), to the Director General of SEC, Ms Mary Uduk, a copy which was obtained by THISDAY on Monday.
The IIADRI is an organisation with a mandate to ensure the stability and growth of the Nigerian capital market through protection of the rights of both the issuers and investors.
There are many companies that have delisted and become private entity without information about what had become their unclaimed dividends.
Owing to this, in the petition, the IIADRI stated that: “As you already know we are the foremost organisation with a mandate to ensure the stability and growth of the Nigerian capital market through protection of the rights of both the issuers and investors.
“It is in pursuance of this objective that we call your attention to some unanswered questions arising from the delisting of public quoted companies and seek your clarification on this. It has come to our notice that some companies after declaring unclaimed dividend have gone ahead to deregister as public limited liability companies.
“We seek to know the law and policy regarding the unclaimed dividend in such companies as they convert to private limited liability companies.”
The group requested for an enlightenment on the policy governing issues of final pay off money approved by such companies to minority shareholders.
“Finally, we call on SEC as the regulator of the capital market to probe all unclaimed dividend and final pay off due to shareholders in all public companies that have converted to private companies to ascertain the safety and where bout of this two set of unclaimed money in the likes of Enpee Plc, Nigerian Bottling Company Plc, Seven-Up Bottling Company Plc, Nigerian Tobacco Company Plc, among others),” it added.
The petition, which was signed by the President of IIADRI, Mr. Moses Igbrude and Secretary, Sebastian Udoh, noted that the timely response of the SEC would, “go a long way in enabling us advise the inquiring shareholders and maintain peace in the capital market.”
The NSE recently delisted Newrest ASL Nigeria Plc and would soon delist First Aluminium Nigeria Plc. Newrest ASL Nigeria Plc had applied for voluntary delisting of the entire 634 million ordinary shares of the company from the exchange.
According to the company, the voluntary delisting was as a result of its inability to meet up with the 20 per cent free float requirement of the exchange.
Also, First Aluminium Nigeria Plc has applied for voluntary delisting, saying shareholders were not benefiting from its continued listing as they were not getting exit opportunities, while the company’s shares continue to trade at a significant discount to the intrinsic value.
According to First Aluminium over the last seven years, there has been little or no trading activity on the shares held by the minority shareholders.
“The share price was stuck at 50 kobo for about six years between June 2011 and June 2017, and thereafter experienced further diminution, both in share price and trading volumes.
“Over the last 18 months daily average volume ranged between 2,815 to roughly 2,918 units during the period July 2017 to December 2018. Shareholders are not benefiting from the continued listing as they are not getting exit opportunities and their investments have been locked up, thereby finding it difficult to dispose of their shareholding. Neither the company nor its shareholders have benefitted as the company’s shares continue to trade at a significant discount to the intrinsic value,” the company had stated.