Shareholders across Nigeria have voiced strong opposition to a legislative move mandating the transfer of unclaimed dividends from company registrars to the Central Bank of Nigeria (CBN), describing the action as unconstitutional and an outright violation of investor rights.
The Independent Shareholders Association of Nigeria (ISAN), one of the country’s foremost shareholder advocacy groups, issued a firm statement condemning the recent passage of a law by the National Assembly which authorizes the Securities and Exchange Commission (SEC) to manage unclaimed dividends through an account opened by the Debt Management Office (DMO) in the CBN.
“This move is a gross violation of shareholders’ rights, a betrayal of investor trust, and a dangerous precedent that threatens the sanctity of private property and capital market integrity,” ISAN said.
The group argued that unclaimed dividends, regardless of how long they remain unclaimed, remain the rightful property of investors or their heirs, and should not be subject to state appropriation or control. ISAN likened the move to “indirect expropriation,” warning that it undermines the core principles of property ownership and free market participation.
“Unclaimed dividends are not government revenue. They are private earnings due to individuals who invested their capital and took financial risk,” ISAN noted. “Centralizing these funds under SEC and CBN control without due process sets a precedent that could shake investor confidence both locally and globally.”
The association criticized the passage of the law for being rushed without meaningful engagement with key capital market stakeholders, including registrars, fund managers, and investor groups. According to ISAN, the bill lacks a clear framework detailing how these funds will be administered, how claims will be processed, and whether investors will be entitled to interest or returns during the holding period.
“There are no transparent systems in place to manage these funds or ensure rightful owners can reclaim them without undue bureaucracy. Instead of simplifying the process, the law introduces more opacity and inefficiency,” they said, particularly noting the difficulty it could pose for rural and aging investors.
ISAN is calling on President Bola Ahmed Tinubu to withhold assent to the bill or, if already signed, suspend its implementation pending judicial review. The association has also announced its intention to challenge the law in court, labelling it “unjust, unconstitutional, and economically harmful.”
“We are mobilising legal resources to ensure this law does not stand. What we need are reforms to the dividend claims process through technology, education, and standardisation — not state seizure disguised as regulatory reform,” ISAN stressed.
In its closing remarks, ISAN urged all Nigerian investors and financial stakeholders to resist the legislation and protect their rights to earned income. “Your dividends are your right — not a fallback fund for the government. Nigeria’s investment future must be based on fairness, rule of law, and inclusive economic growth.”
The controversy comes at a time when Nigeria is making significant efforts to attract foreign investment and deepen financial inclusion. Critics argue that moves like this risk undermining these goals, especially in an environment where policy consistency is crucial for economic recovery and capital market growth.
The debate over unclaimed dividends — which run into billions of naira annually — has long stirred tension between regulators seeking to mop up idle capital and investors advocating for property protection. This latest development could mark a significant flashpoint in regulatory-investor relations.
About The Author
