The Securities and Exchange Commission (SEC) has ordered all public companies and Registrars to stop treating dividends older than 12 years as “statute-barred”.
The Commission issued this directive in a statement on Tuesday, particularly referring to dividends declared before the enactment of the Finance Act 2020.
This move reaffirms the provisions outlined in Section 60 of the Finance Act, which governs unclaimed dividends and their proper treatment.
According to the Act, dividends unclaimed for over six years must be transferred to the Unclaimed Funds Trust Fund (UFTF), pending shareholder claims.
SEC Director-General Mr Emomotimi Agama stated that shareholders may still claim dividends not older than 12 years as of 31 December 2020.
Agama noted some companies and Registrars wrongly treat such dividends as “statute-barred”, ignoring the Finance Act 2020’s provisions.
“In response to ongoing inquiries, the Commission wishes to clarify the proper interpretation and handling of such unclaimed dividends,” he said.
He explained that under Section 60 of the Finance Act 2020, dividends unclaimed for six years must be moved to the UFTF.
These funds are to be held in trust, awaiting legitimate claims by shareholders at any point in the future.
Until the UFTF is fully operational, the SEC directs companies and Registrars to honour all valid dividend claims from 31 December 2020 onwards.
Agama added that companies and Registrars must comply immediately and submit regular reports as required under the Commission’s rules and regulations.
