Unclaimed Dividends of Listed Corporate Firms in Nigeria: A Re-Examination

Abstract

The study examines why unclaimed dividends continue to grow in the Nigerian Stock Market despite many panaceas introduced by regulators to curb its existence. The effect of e-dividend and Bank Verification Number (BVN) on unclaimed dividends was also determined with a view to contributing to literature and current debates on the resolution of unclaimed dividends in Nigeria. The study adopts quantitative research method. It uses desk review and survey research design through administration of questionnaire. Primary data was obtained from two hundred and thirty (230) respondents selected through snowballing and purposive sampling techniques from the stakeholders involved in the payment of dividends to shareholders. The data was analyzed with simple percentages. The study finds that e-dividend payment and BVN have positive effect on unclaimed dividends by reducing their value. However, they cannot absolutely eradicate the menace of unclaimed dividends in the Nigerian Stock Market. This is because other factors which e-dividend payment and BVN cannot resolve exist in the market. These are death of shareholders, shareholders’ fear, most especially civil servants, of being investigated for using multiple and fictitious names to buy equity shares and legal provisions that placed the custody and investment of unclaimed dividends with the listed corporate firms for their financial gains. It was recommended that a legislation with the consensus and trade off from all the stakeholders be promulgated for creation of shareholders’ unclaimed dividends and assets trust fund, which will be managed by trustees appointed by shareholders under the regulatory supervision of SEC and should be independent of the listed corporate firms’ management.