THE Independent Shareholders Association of Nigeria (ISAN) has rejected decisions by the National Assembly to transfer unclaimed dividends to the Central Bank of Nigeria (CBN) for management.

ISAN expressed the worry in a statement signed by its national coordinator, Moses Igbrude, sent to The ICIR late Saturday, June 28.

“We, of the Independent Shareholders Association of Nigeria (ISAN), strongly reject the Unconstitutional Transfer of Unclaimed Dividends to the Central Bank.

“We, unequivocally condemn the recent decision by the National Assembly to pass legislation mandating the transfer of all unclaimed dividends from company registrars to the Central Bank of Nigeria (CBN) for management,” ISAN stated.

It described the move as a gross violation of shareholders’ rights, a betrayal of investor trust, and a dangerous precedent threatening the sanctity of private property and capital market integrity.

The ICIR reports that the ISAN concern came following a decision on Friday, June 27, by the House of Representatives Public Accounts Committee (PAC) to the CBN.

The decision was taken after a team of CBN, led by Deputy Governor of Operations Directorate, Bala Bello, and the Minister of Finance, Wale Edun, appeared before a Joint Committee of PAC and Public Assets on Wednesday, June 25.

During the session, the panel grilled the CBN team on the apex bank’s failure to remit operating surplus funds as well as its management of unclaimed dividends and dormant account balances.

The chairmen of both committees, Bamidele Salam and Ademorin Kuye, were reported to have said a letter had been forwarded to the CBN Governor, Yemi Cardoso, over the matter.

In the letter, the lawmakers recall that the Finance Act 2020 mandates that dividends of all listed companies in Nigeria, which have remained unclaimed for six years or more, as well as balances in accounts dormant for six years in Deposit Money Banks, shall be transferred to an established fund known as the Unclaimed Funds Trust Fund.

The fund is to be administered by a governing council comprising the Minister of Finance, the Debt Management Office, and other relevant bodies.

The joint committee faulted CBN’s position that the Banks and Other Financial Institutions Act (BOFIA) 2020 grants it the authority to manage and control dormant account balances.

It directed that CBN furnish it with the total value of unclaimed dividends and dormant account balances on or before June 30.

It also directed the CBN to ensure that all unclaimed dividends and dormant account balances, as defined above, are transferred to the Unclaimed Funds Trust Fund account within 14 days of receipt of its letter.

In its statement on Saturday, ISA said it opposed the move because it violates ownership rights.

“Unclaimed dividends are not government revenue. They remain the legal property of individual investors and their heirs, regardless of the time elapsed,” the association noted.

It stressed that any attempt to centralise and manage the unclaimed dividends under CBN control is a form of indirect expropriation, stating it undermines market confidence.

“This law will shake investor confidence in Nigeria’s capital markets. Local and international investors need assurance that their returns will be protected, not confiscated under state pretexts,” the association stated.

It also condemns the plan to have a lack of stakeholder consultation.

“The passage of this law without broad consultations with shareholders, registrars, and capital market stakeholders reflects a disturbing disregard for participatory governance and due process,” ISA maintained.

It further expressed worries that there are no clear frameworks for how the CBN intends to manage the unclaimed dividend funds, querying what returns will be offered to rightful owners, or how and when claims will be honoured.

This is a recipe for bureaucratic mismanagement and corruption, ISAN said as it added that the mob is counterproductive to the CBN’s financial inclusion drive.

“Instead of simplifying the claim process for unclaimed dividends, this law adds another layer of opacity and complexity, especially for rural and ageing investors who already face hurdles in reclaiming dividends,” ISAN maintained.

The shareholders’ association demanded an immediate suspension of the implementation.

“We call on President Bola Ahmed Tinubu not to assent to this law. If already signed, we demand an immediate suspension pending judicial review.

Hinting that it is mobilising legal resources to challenge this law in court as unconstitutional, unjust, and economically detrimental, ISAN said it proposed reform and not confiscation.

“We propose that efforts should focus on reforming the claims process at the registrar level through technology, public education, and standardisation, not through centralisation and state seizure.

“We call on all shareholders to join us in rejecting this injustice. Your dividends are your right, not a government fallback fund,” it urged.

The association believes that the future of Nigeria’s investment climate must be built on fairness, property protection, and inclusive growth, not arbitrary power grabs.

The ICIR reported recently that the Securities and Exchange Commission (SEC) has asked companies and their registrars who default on paying unclaimed dividends to shareholders to honour the provisions stated in the Finance Act 2020.

In the directive it issued on Tuesday, June 10, the SEC stated that shareholders could now claim up to 12 years of unclaimed dividends.

It said its directive aligns with Section 60 of the Finance Act 2020.

It reads, “The attention of the Securities and Exchange Commission has been drawn to the fact that paying companies and their Registrars have continued to treat unclaimed dividends of public companies that are older than 12 years as being ‘statute-barred’ without recourse to the provisions of the Finance Act 2020.

“Pending the setting up and operationalisation of the (Unclaimed Fund Trust Fund), UFTF by the Federal Government, under its powers under Sections 3 (4) (e) and 93 of the Investments and Securities Act 2025, the Commission hereby directs public companies and their Registrars to continue to honour all requests by shareholders for the payment of unclaimed dividends as described above, with effect from December 31, 2020.”

The SEC also ordered listed companies and their registrars to immediately effect compliance and submit periodic reports on the same in the manner prescribed in the Commission’s rules and regulations.

It further clarified that the import of the provisions of Section 60 of the Finance Act 2020 is that where dividends declared by a publicly quoted company remain unclaimed for six years or more, such dividends are expected to be transferred to the Unclaimed Funds Trust Fund (UFTF).

The fund is to be held in trust and managed by the government until the shareholder presents a claim for the unclaimed dividends.

The ICIR can report that over the years, the SEC has failed to curb the escalating issue of unclaimed dividends in the capital market, as the figure keeps rising.

At his first Capital Market Committee (CMC) meeting in Lagos, upon assumption of office, the SEC director general, Emomotimi Agama, disclosed that the total unclaimed dividend in Nigeria’s capital market has risen to N215 billion as of March 2024.