Expert tasks capital market regulators on dividends delay

Kasimu Garba Kurfi, a capital market operator and Chief Executive Officer of APT Securities and Funds Limited, has called on the Securities and Exchange Commission and the Nigerian Stock Exchange to tackle the delay of dividends payment.

Kurfi told Financial Street that the regulators, particularly SEC, should provide a template that ensures no more delay in dividend payment.

He said, “If the registrar doesn’t pay your dividend for a year, two years or more, regulator will only tell the registrar ‘pay him’ and that is all! But what of the time value of money, which was not put into consideration? This is hampering investors’ confidence.”

Kurfi added, “You hardly see big investors suffering from delayed payment of dividend. Most of them who have 5 percent, 10 percent, 20 percent and higher stakes in companies don’t suffer from this problem. They are settled immediately dividends are declared even before you and I who have small units. It should not be like that.

“I believe that the regulators, particularly the Securities and Exchange Commission has to come out with a template that ensures no more delay in dividend payment because if they can do that, it will promote investors’ confidence generally in the market and you will see more participation by retail investors. This should not be allowed to continue.

Speaking on the speculation that some companies declare dividends but do not have the money to pay all investors, the capital market expert said, “The CSCS is the one in charge of paying coupon of the Federal Government’s bonds and we have no issues with that. We hardly have any client who complains that he doesn’t receive dividend or interest. So, if the CSCS can demonstrate such capability, the responsibility of dividend payments should be transferred from the registrars to the CSCS if this will solve the problem.

“I can tell you that almost all the companies that pay dividends have their shareholders complaining of not getting their dividend on time. If data is synchronized between the CSCS and the registrars, then we shouldn’t be facing the challenge of delayed dividend payment.

“If we still have this delay, then the problem has to do with the money being declared not adequate enough to take care of all investors at a time and in view of this, I am proposing that while the exchange insists that any company declaring dividend should drop their cheques with the CSCS and let’s see if the CSCS will delay.”

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