Following inadequate sensitisation, a total of 11 listed companies on the Nigerian Exchange Limited (NGX) reported accumulated N92.71billion outstanding unclaimed dividend in 2021.
The 11 companies reported N78.2 billion outstanding unclaimed dividend in 2020, representing an increase of 19 per cent when compared to 2021 unclaimed dividend.
Unclaimed dividend is the dividend, which is being paid by the company but the shareholder has not claimed the dividend. Unclaimed dividend is to be paid by the company as and when demanded and hence is a liability for the company.
Unclaimed dividends, according to the Director-General, Securities & Exchange Commission (SEC), Mr. Lamido Yuguda are caused by multiple subscriptions, in which some investors used various methods to subscribe for, more than the allowed amount of shares during public offerings.
THISDAY analysis of the 11 companies’ audited result and accounts for the period ended December 31, 2021, revealed that Zenith Bank Plc, followed by Access Bank Plc have the highest amount of unclaimed dividend in the banking industry.
Dangote Cement Plc, followed by Nestle Nigeria Plc have the largest amount of unclaimed dividend in the manufacturing sector, given the years both companies have been rewarding shareholders with dividend payout and bonuses on their investment.
Other notable companies with unclaimed dividend are United Bank for Africa Plc (UBA), FBN Holdings Plc, Nigerian Breweries Plc, Stanbic IBTC Holdings Plc MTN Nigeria Communication Plc, Lafarge Africa Plc, and Seplat Petroleum Plc.
According to 2021 audited results, Zenith Bank’s unclaimed dividend hits N28.65 billion, representing an increase of 2.2 per cent from N28.04 billion reported in 2020. Access Holdings reported N17.28 billion unclaimed dividend in 2021, an increase of 9.8 per cent from N15.73 billion in 2020.
Access bank in its audited 2021 FY stated that, “Unclaimed dividend is the balance of dividend declared by the Bank but yet to be claimed by shareholders.
“The amount relates to the portion that has been transferred to the Bank by the Registrar in accordance with SEC guidelines on Return of Unclaimed Dividends for the corresponding assets with Asset Managers. The amount is payable on demand to shareholder.”
However, FBN Holdings reported 24.2 per cent increase in unclaimed dividend to N11.95billion in 2021 from N9.62billion in 2020, while UBA’s unclaimed dividend rose significantly by 49.8 per cent to N11.5billion in 2021 from N7.68billion in 2020.
As Dangote Cement reported N4.6billion unclaimed dividend in 2021, an increase of 15 per cent from N4billion in 2020, Nestle Nigeria reported N6.6billion unclaimed dividend in 2021 from N5.57billion in 2020.
Nigerian Breweries closed 2021 with N4.6billion unclaimed dividend from N900 million reported in 2020, as Stanbic IBTC Holdings grew its unclaimed dividend by 11.09 per cent to N3.54 billion in 2021 from N3.18billion in 2020.
MTN Nigeria Communication’s unclaimed dividends outstanding as at December 31, 2021 stood at N1.65billion from N1.36billion in 2020.
In addition, Lafarge Africa reported N1.43billion outstanding unclaimed dividend in 2021 from N1.27billion in 2020, while Seplat Energy reported N920 million ($1,567,445.75 and N291,913,855.20.) unclaimed dividend in 2021 from N856million (US$593,230.86 and N642,070,562.85) in 2020.
According to capital market stakeholders, as these companies declared dividend payout in audited results for period ended December 31, 2021, unclaimed dividend in the Nigerian capital market is expected to soar when audited results for period ended December 31, 2022 are released to the investing public.
They maintained that these unclaimed dividends reported by these companies are accumulated amounts mostly constituted before Securities and Exchange Commission (SEC) introduced Electronic-Mandate initiatives, targeted at tackling unclaimed dividend menace in the Nigerian capital market.
They added that multiple subscriptions securities, incorrect data and sensitisation by market regulators are majorly the challenges contributing to unclaimed dividend in the Nigerian capital market.
Speaking from a shareholder’s perspective, the National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Dr. Anthony Omojola said many shareholders have not keen into the E-mandate introduced by SEC, blaming it on Annual General Meeting (AGM) held proxies.
The Managing Director/CEO of First Registrars & Investor Services Ltd, Mr. Bayo Olugbemi in a chat with THISDAY said, “There is need to find out the percentage of the outstanding to how much was declared by these companies.
“If companies keep declaring dividend, certainly there will be an increase in unclaimed dividend. They might be out of the country, in jail for years and some other reasons. Once a shareholder does not give his bank mandate to his/her registrar, the dividend remains unclaimed.”
The CEO, Wyoming Capital & Partners, Mr. Tajudeen Olayinka said, “The truth is that some investors are yet to actualize the E-dividend mandate by SEC, and they appear to be in large numbers. Some of them are outside Nigeria, and have been away from the country for quite a long time. Some are late, while some others may have reasons for temporarily staying away.”
Analyst at PAC Holdings, Mr. Wole Adeyeye said the E-mandate was a game changer in the capital market, calling on shareholders to valid their information on the portal.
He also urged market stakeholders to further sensitize shareholders to update their information with their stockbroker or at any nearby registrar.