*Says, ‘it increases unclaimed dividends’
The Securities and Exchange Commission has said that it would begin to punish investors in the Nigerian capital market who deliberately subscribe more than once to respective public offers.
The Point investigation revealed SEC, as punishment, would prosecute and possibly forfeit all such investments.
The Commission said it was a major decision of its last Capital Market Committee meeting which “approved the report of a marketwide committee on formulating a uniform position for the treatment of multiple subscriptions to public offers.”
It noted that the SEC was concerned that the use of non-existent identities to make multiple subscriptions to public offers had contributed to the huge unclaimed dividend challenge, which it was trying to tackle.
The commission said “the CMC, therefore, unanimously agreed that submitting multiple applications for the same Public Offer was, in every consideration, illegal; and that the wrongful acts were carried out by the perpetrators, under false pretence.”
SEC, however, maintained that, “the Nigerian capital Market cannot and should not be seen to reward the wrongful acts/illegality of the perpetrators.
“This was with a view to ensuring the global sustainability of the Nigerian Capital Market’s integrity and reputation.”
The Capital Market Committee report has also observed two groups of investors involved in multiple subscriptions. The first group (A), stated that investors actually existed but joggled their names in different forms to enable them purchase more than the permitted units of shares on offer.
The second group (B) was the class of investors that did not actually exist but used fictitious names for the purpose of purchasing more than the permitted number of shares during public offers.
The report, however, was of the opinion that both groups had fraudulent intentions and their actions were collectively illegal.
At the meeting, participants recommended that, Group ‘A’, as highlighted above, should be considered for a level of forbearance by giving them a grace period up to 1st September, 2017 within which to come forward and expressly prove their individual identities, subject to the highest Know Your Customer criteria, to be defined by the SEC.
“Those owners, whose identities are established, would then be allowed to consolidate their accounts. After the expiration of the timeframe, unclaimed dividends, traceable to this category that have not been identified and consolidated, along with their securities shall be transferred to the Nigerian Capital Market Development Fund to be managed transparently in a separate basket under clear guidelines,” SEC Head, Corporate Communications, Naif Abdussalam, said in a statement.
