The Securities and Exchange Commission (SEC) has warned quoted companies and capital market registrars against the practice of making selective payments and distribution of dividends.
The capital market regulator said that some of them were unwilling to release the unclaimed dividends in their custody and employed several antics to frustrate shareholders from enjoying the benefits of the E-DMMS platform.
The warning was issued by the Director-General of SEC, Mr Lamido Yuguda, at the Institute of Capital Market Registrars (ICMR) 10th Annual Conference, Investiture of fellows, Induction of Associates and Annual General Meeting in Lagos on Saturday.
The SEC boss, in his keynote address, said that the attention of the commission had been drawn to the fact that some companies and registrars carry out selective payments and distribution of dividends.
Yuguda threatened that the commission would not hesitate to sanction any erring operators in relation to unclaimed dividends or any other issue.
He said, “We, therefore, urge the ICMR to encourage its members to uphold the Code of Ethics of the profession and as contained in the Rules and regulations of the commission.
“Regrettably, the number of mandated accounts has been on the decline for some time and the rate at which investors are coming forward to conduct their KYC has not been encouraging. I urge the ICMR and its members to do their best to address some of these challenges.’’
The SEC boss said that the operators have a duty to uphold the integrity of the capital market to foster investor confidence adding that investors are the greatest assets in the capital market.
Speaking on the theme of the conference; “Reinventing the Nigerian capital market for growth: The digital technology approach,” Yuguda said the commission would continue to engage with all stakeholders on new developments in the digital technology space.
He said, “I believe that we all have a common interest in seeing these opportunities harvested, but also in mitigating the risks so that we all can reap the benefits. As you are aware, the SEC has committed resources to put in place several measures to address the issues of unclaimed dividends.
“Despite this commitment of resources, the issues still linger.’’
He pointed out that the commission had adopted a three-pronged approach to regulating digital innovation namely; safety, market deepening and provision of solutions to problems noting that SEC would continue to ensure that intermediaries harness digital technology in such a way to better serve the needs of investors in all aspects of the capital market.
Also speaking at the event, the President & Chairman of Council, ICMR, Mr Seyi Owoturo, in his welcome address, said that the Covid-19 crisis brought about digital transformation in the way companies in all sectors and regions do business.
SEC had recently moved to strengthen enforcement against illegal and fraudulent market operators who engage in malpractices or market infractions.
Some of their activities include market abuses, fraudulent disposal of investor assets, illegal fund management, wonder banks, insider dealings, corporate accounting fraud Ponzi schemes and share manipulation by capital market operators.
Earlier in November, the commission had promised to intensify monitoring and surveillance of the capital market in order to curb unethical conduct.
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