A finance expert and the Chief Executive Officer of SystemSpecs Limited, John Obaro, has suggested that to create the incentive for companies to act in the best interest of shareholders amid the N170 billion unclaimed dividends, they should be made to pay penalty interests on the unpaid dividends.
He said this during his keynote presentation at the 10th annual conference of the Institute of Capital Market Registrars. The Securities and Exchange Commission had announced in August that the total unclaimed dividends in the Nigerian capital market stood at N170bn, which was reported by The PUNCH.
Obaro argued that current laws do not create the incentive for stakeholders to solve the problem.
He said, “We cannot look for a solution from those who stand to benefit from non-resolution. I understand that there is a regulation that says 12 months from the payment date for the declared dividends, 90 per cent of the unclaimed portion will be returned to the company that declared the dividend while 10 per cent will remain in the custody of the registrars.
“Where is the incentive for them to find a solution? How about compelling companies and registrars to start paying penalty interest on the unclaimed dividends?”
Obaro commended some of the efforts made to tackle the problem which includes the introduction of the Electronic Dividend Payment Mandate System. He said that it was a major step in the right direction where dividends are paid to the specified bank account of the investor on the payable date.
He listed some tech trends that could help: Data and Analytics; Cloud Computing; Artificial Intelligence; and Distributed Ledger Technology also referred to as Blockchain Technology.
He also advocated for a change in legislation and guidelines to ones that moved the customer to the centre of the benefits of investments.
At the event, the ICMR carried out the investiture of 14 new fellows and seven honorary fellows, and inducted 17 new associates.
The President and Chairman of Council, ICMR, Seyi Owoturo, during his welcome address, said that the theme of the conference ‘Reinventing the Nigerian Capital Market for Growth: The Digital Technology Approach’ was aimed at ensuring that the new combinations of talent and technology deliver decisive advances and value in investor experience and operational efficiency.
He said, “We expect digital technology approach to drive positive outcomes in streamlining processes, harnessing data and shaping entirely new ways of doing business. This is about uniting every port of the market in a common purpose.”
