Retail shareholders in the Nigerian capital market have raised an alarm over unclaimed dividend related frauds incubating in some Registrars.
The alarm which was in adherence to call by capital market regulators on investors to expose irregularities in the bourse via the whistle blowing portal, has heightened renewed fraud related cases in the market.
Shareholders, under the aegis of Progressive shareholders Association of Nigeria (PSAN) has alleged that over N500 million shareholders unclaimed dividend funds may have been diverted by unscrupulous market operators through some Registrars.
Describing the recent Registrar related fraud as latest addition to too many crimes in recent times rocking the Capital Market, the group called on Securities and Exchange Commission (SEC) to urgently arrest the ugly trend before it devours the entire market.
SEC, the group said, liaising with the Central Bank of Nigeria (CBN), the Nigerian Interbank Settlement System (NIBSS) and the Economic and Financial Crime Commission (EFCC) need to come out with the transactional data of the alleged diversions, in order to assuage the investing public of sanity in the market.
The retail investors group identified Mainstreet Registrars, former Afribank Registrars Limited, among few other Registrars where diversion of unclaimed dividend may have remained at its peak over the years.
National Chairman, Progressive Shareholders Association of Nigeria, Mr. Okezie Boniface disclosed that there has been a disclosure that N280 million unclaimed dividend belonging to the shareholders of Afribank was alleged to have been withdrawn by former acting MD seconded by SkyeBank to direct affairs of the Registrars, while shareholders of the company.
PSAN said that more of such alleged fraud could easily be identified by the searchlight of the apex capital market regulator’s forensic experts on fraud detection, a direction he urged the commission to take in order to recover diverted unclaimed dividend by cloning experts and restore dwindling market confidence.
The group asserted that the e-dividend alleged fraud, has further raised the question on how the N45 billion SEC claimed was paid over one year, was affected and into whose account. “How did SEC arrive at the sum of N45billion that have already been paid out by the registrars in unclaimed dividends within one year”
Calling on security operatives to intensify effort at unraveling unclaimed dividend funds wherever, diverted by fraudsters through cloning of documentation of real owners, Okezie said that the N280 million was allegedly withdrawn under the presence to be paid to the real beneficiaries, but diverted to various individual accounts supposed to be shareholders, which turned out to be clones (fake shareholders).
“We demand that the Security and Exchange Commission (SEC) as a matter of urgency will quickly liaise with CBN to give directives to NIBSS to corporate with the police who are already investigating the matter to give them the details of the transactions.
He said that such fraud was easy to commit, hence the SEC endorsed for unclaimed dividends to be plunged back into the companies that declared them, with the Registrar retaining a given portion.
The culprits, he said should face full wrath of the law “They must be made to pay for their fraudulent acts, the poor owners of the monies will be left to wallow in hunger and abject poverty while the culprits go about enjoying their loot”
Mainstreet Registrars is only one case’ Okezie said “what of other places wherein wholesome malpractices might have been going on? SEC should overhaul the system before it kills the markets”
He called for establishment of e-dividend committee and for SEC to ensure Registrars develop a master data list which must be at SEC and the committee will use it to determine how much was paid out and how much is left in the accounts.
The committee he said, will be constituted by SEC and mandated to meet at least quarterly at the office of SEC to reconcile the accounts of various companies with the Registrars, Company secretaries and nominated shareholder leaders who will serve in the committee as well as some nominated stockbrokers to be in that committee that will save us this menace and recurrence of fraud.