Nigerian shareholder groups have opposed plans to redirect qualifying unclaimed dividends to the Nigerian Education Loan Fund, arguing that the money remains connected to the rights of investors and should not be used for other government programmes.
The opposition follows a Federal Executive Council decision last week approving the use of qualifying funds from the Capital Market Trust Fund and the Dormant Account Trust Fund to support NELFUND. President Bola Tinubu also directed that eligible liquid funds recovered by the Economic and Financial Crimes Commission be transferred to the student-loan scheme, according to Education Minister Tunji Alausa.
Shareholder associations, speaking in separate interviews on Sunday, said redirecting unclaimed investor funds to a government-backed programme could undermine confidence in the capital market.
The president of the New Dimension Shareholders Association of Nigeria, Patrick Ajudua, said the government should not take control of dividends belonging to shareholders.
Ajudua argued that unclaimed dividends should remain available to their owners and questioned the inclusion of investor funds in a structure alongside other public funds.
Other shareholder leaders also expressed opposition, maintaining that the funds should be managed in a way that protects the rights of investors and their beneficiaries.
The dispute centres on dividends that have remained unclaimed for years. Under the Finance Act 2020, dividends declared by public companies quoted on the Nigerian Exchange that remain unclaimed for six years or more are expected to be transferred to the Unclaimed Funds Trust Fund, where they are held in trust and managed pending a claim by the shareholder.
That legal framework makes the proposed redirection particularly sensitive because the funds are not treated simply as abandoned money. The SEC has said the Unclaimed Funds Trust Fund is to hold and manage qualifying dividends pending claims by the shareholders entitled to them.
The issue has also grown in significance because of the scale of unclaimed dividends in Nigeria’s capital market. The SEC has continued efforts to reduce the backlog by encouraging investors to use electronic dividend payments and providing a process for shareholders to trace and recover outstanding dividends.
For the government, the decision is intended to strengthen NELFUND’s long-term funding. Alausa said the directive covers only eligible liquid and unencumbered funds, while money subject to legal disputes or restrictions would be excluded. The government has also directed relevant ministries and agencies to work on the legal and operational framework for the transfer.
The shareholder opposition now raises a broader question over whether qualifying unclaimed dividends can be redirected to another public purpose while remaining subject to the rights of investors who may later come forward to claim them.
For shareholder groups, that question is likely to remain central as the government works out how the FEC decision will be implemented.
