What that means is that it is going to affect the delivery of the shareholders’ certificates. While dispatching the shareholders’ dividend, it would be posted to the old address and what we see most times are letters of complaints and sometimes, some of these shareholders would go straight to the press thereby giving such registrar a bad image in the face of the public.
Secondly, we have seen instances whereby some shareholders don’t pay for their post office boxes and when they fail to pay NIPOST, what they do most times is to close such boxes and because we are not aware of such closure of boxes, what we do is to send the dividend to the same box and what happens is that, it is either they are sent sometimes as unclaimed or not even returned to us at all.
There is no way we would get to know about this unless we receive complaints from the affected shareholders. Again, the issue of postage has become a great problem as regards the cases of interception of dividend warrants which has now become the order of the day.
We have seen cases were money warrants are being intercepted and are being converted. There are still some cases before The Economic And Financial Crimes Commission (EFCC), regarding the interception of warrants, whereas the actual owners have been sidetracked. They are still expecting their dividends not knowing that they have been intercepted, but thanks to the e-dividend payment option.
As a matter of fact, all registrars are on their knees now praying fervently that the e-dividend payment should be a success because what it means is that after the declaration of the dividends at the annual general meetings, everyone can go to sleep with their two eyes closed
How would you rate the level of complaints by shareholders to e-dividend payment option?
I would give kudos to the Securities and Exchange Commission (SEC) as far as the enlightenment and awareness given to the public via workshops in several places as well as in trying to inform investors on the importance of e-dividend. On our part, as registrars, we have pledged our support that whatever we have to do to make the e-dividend payment a succeed, we would do.
As we speak now, we can rate the level of compliance at 30 per cent because to get people to have a paradigm shift, away from what it used to be is not just easy, especially in a country like ours. You see, people prefer to see their dividend warrant certificate physically and what we have to do is to assure them that with the use of the e-payment platform, it would be more effective.
I also think we need to do a lot of campaigns and awareness on the importance of the e-dividend, because, even the educated ones want to see their e-dividend physically, but on our part, we are doing everything possible to make the e-dividend payment option a success. Whenever we are dispatching forms to the companies we service, we insert the e-dividend forms so that they can complete the registration, so that they can imbibe this idea. In this business, we strongly believe that it would go a long way to reduce the number of unclaimed dividends which, as we speak runs into billions of naira.
Given the fact that banks are now well capitalised and given the large volume of shareholders you now have to deal with as registrars, how have you been coping under the challenging dispensation?
From day one, the information technology we use at Sterling Registrars is very robust. Years before now, we have an information system in place that can conveniently service over 20 million shareholders
Would you say that the global financial meltdown has affected the way shareholders relate with registrars? Are they dumping their shares or holding it?
You see, there is no segment of this economy that is not affected by the global financial crisis. On the part of the shareholders, what we have observed is that the moment the shareholder receives the annual report of the company that dividend is payable, the office would be filled with people with the request – is my dividend warrant ready?
My saving grace is that I have a company that I service and am being paid quarterly and it is enough for me to pay my staff to sustain me and also the company’s business. So, I do not get my income from the buying and selling of shares and like I said, the brokers are more affected.
But, I must say that we are affected in terms of new businesses that come in. Like I have about five main issues that could not come to the market because of the crisis. I cannot execute it because they believe that this is not the right time to come to the market. So if I had executed this new deals, it would have been easier. Even the companies we are servicing were also affected as some companies have come to us to have a downward review of the fees and charges.
The issue now is, what are we doing when the public is not coming? So, I must say it has affected every player in the capital market, but I will still say that this is the time to buy and invest in cheap stocks.
What is your perception of the capital market vis-à-vis the role of stock brokers, stock broking firms and the general lull in the economy?
I must confess that from the realities before us, I cannot see any significant or positive changes for now. Before we can start to see positive changes, we would be talking about the first or second quarter of 2011 because a lot of damage has been done to the market.
And people have really lost confidence in the market. There is no significant improvement. And if people’s mind set is not changed, we can’t imagine what will happen because some people have even vowed not to invest in the market because of the experience they have had in the very recent past.
With your experience in this business, what do you expect from the regulators to put in place to make the market move forward and boost activities generally?
Like I have said, I would like to give kudos to the Securities and Exchange Commission (SEC) because they are doing everything humanly possible to sanitise the capital market. For instance, the issue of our fees. We believe that what we charge now is nothing compared to the services we render and in fairness and we have had several meetings with SEC and they have seen reasons with us that since we are the main custodian in the capital market, SEC has come to the conclusion that whatever transactions are made, let us carry companies along so that they would be involved in the decision making as well.
On improving our services, we have met with SEC on how we could improve our services and they have given good suggestions.
This, we are doing through our institute. I remember before now that registrars are most times, made the scapegoat whenever interception or conversion takes place. And we have told SEC that it should be the duty of the collecting banks alone to know who opens what account and what transactions are taking place.
Because we want to improve on the payee column in the face of the dividend column, there used to be a signature space in front of the columns for the shareholders to sign, but SEC has seen wisdom in expunging the signature column as banks should know who is depositing or transacting with them.
So now, the registrars now have a big relief as to the return of any dividend warrant not collected as far as that sector is concerned and we would continue to meet with SEC on how we can continue to see to the improvement in the industry.
