The Securities and Exchange Commission (SEC) has directed all public companies and Registrars to cease treating dividends older than 12 years as “statute-barred”.
The directive, issued in a statement on Tuesday, specifically applies to dividends declared prior to the enactment of the Finance Act 2020.
This development reaffirms the provisions of Section 60 of the Finance Act, which addresses the treatment of unclaimed dividends.
Under the Act, any dividend unclaimed for more than six years must be transferred to the Unclaimed Funds Trust Fund (UFTF), where it remains available for legitimate claims by shareholders.
SEC Director-General, Mr Emomotimi Agama, clarified that shareholders are still entitled to claim dividends not older than 12 years as at 31 December 2020.
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He noted that certain companies and Registrars have erroneously classified such dividends as statute-barred, contrary to the provisions of the Finance Act 2020.
“In response to ongoing inquiries, the Commission wishes to clarify the proper interpretation and handling of such unclaimed dividends,” he said.
Agama further explained that Section 60 of the Finance Act 2020 requires dividends unclaimed for six years to be remitted to the UFTF, where they are to be held in trust indefinitely, pending legitimate claims.
Until the UFTF becomes fully operational, the SEC has instructed companies and Registrars to honour all valid dividend claims dating from 31 December 2020 onwards.
Agama added that immediate compliance is required, and all relevant entities must submit regular reports in accordance with the Commission’s rules and regulations.
