SEC orders immediate payment of over N200bn long-unclaimed dividends to investors
BY TEMITOPE ADEBAYOÂ
The Securities and Exchange Commission (SEC) has ordered public companies and their Registrars to halt the wrongful classification of over N200 billion worth of unclaimed dividends as statute-barred, particularly those declared before the enactment of the Finance Act 2020.
In a circular issued by the Commission, the SEC raised concerns that many companies and Registrars have continued to violate Section 60 of the Finance Act by incorrectly deeming certain unclaimed dividends as time-barred, thereby denying rightful shareholders access to their entitlements.
The directive clarifies that dividends unclaimed for six years or more should, by law, be transferred to the Unclaimed Funds Trust Fund (UFTF), where they remain accessible to investors until proper claims are made. The Commission stressed that until the UFTF becomes fully operational, all companies and Registrars must continue to honour valid dividend claims in full compliance with existing laws.
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Under the new directive, any unclaimed dividend issued before 31 December 2020 and still within the permissible 12-year window remains claimable by shareholders. The SEC further mandated all affected entities to comply immediately with the directive and to submit regular compliance reports as stipulated in its Rules and Regulations.
The Commission’s move is seen as a major step to boost investor confidence and improve market integrity by ensuring that billions of naira trapped in dormant dividend accounts are returned to their rightful owners.
