By Chinwendu Obienyi

After strong indications emerged last week that the Federal Government has finally taken over management of the Unclaimed Dividend Trust Fund (UDTF), Nigerian shareholders have vowed to take the matter to court in search of redress.

This is coming after the Securities and Exchange (SEC) admitted that it now manages the fund alongside the Debt Management Office (DMO), contrary to Nigerian shareholders’ position on the matter.

Stakeholders fears on the matter began to grow  after the Federal Government decided to securitise unclaimed dividends and inactive account balances in the country financial system for up to six years. This was further compounded with government’s decision to include the management dormant account balances in the assented 2020 Finance Bill, along with many other provisions intended to mitigate Nigeria’s fiscal frailties and economic crunch caused by the COVID-19 pandemic.

These developments however confirmed Nigerian shareholders’ fears and opposition in 2020 to the establishment of UDTF proposed to address the growing rate of unclaimed dividend currently estimated at N200 billion.

They had then argued that the SEC was colluding with the government to control the fund for their use which may eventually end up being misappropriated. The shareholders fears were further justified when the SEC boss Lamido Yuguda, attempted to explain the Commission’s involvement with the UDTF.

Related News

Speaking to newsmen during a media briefing on the outcome of the first Capital Market Committee meeting of 2022 via Zoom, Yuguda, while voicing concern about the market’s high proportion of unclaimed dividends, said dividends that had not been claimed over a certain period were being transferred into the trust fund.

He said: “Unclaimed dividends have now gone into a new trust fund (UDTF) that is now managed by the DMO and so SEC is not the only agency overseeing the UDTF. We still have cases of multiple subscriptions but we are working very hard on solutions to tackle them especially in the area of unclaimed dividends. This is why we are encouraging those who have yet to claim their dividends to do so”.

Reacting to the development at the weekend, shareholders who spoke to Daily Sun via telephone, stated that the take-over was an exercise of over-riding power by government. They added that the SEC has successfully failed to protect sharehoders’ interest and called on the Economic and Financial Commission (EFCC) and the Ministry of Finance to immediately commence the process of probing SEC .

They  have also threatened to seek redress in court over the situation.

Patron of Nigeria Shareholders Solidarity Association (NSSA), Timothy Adesiyan, explained that the rise of the unclaimed dividends was due to the cumbersome processes used in getting them.