Shareholders have rejected the federal government’s plan to use unclaimed dividends and funds in dormant account to money the Nigerian Education Loan Fund (NELFUND), warning that the move could undermine investor confidence and raise serious questions over ownership rights.
The shareholders also faulted the decision to consider unclaimed dividends alongside cash recovered by the Economic and Financial Crimes Commission (EFCC), arguing that legitimate earnings belonging to investors should not be treated as proceeds linked to financial crimes.
National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), Moses Igburude, described the proposal as unacceptable and questioned why government would seek to deploy assets belonging to citizens to finance its programmes.
“How can the government, who is supposed to protect its citizens’ assets, be the one taking over their assets just because they need money?” Igburude asked.
He said the classification of shareholders’ legitimate earnings alongside crime-related funds was particularly troubling.
“The most erroneous thing is the classification of legitimate and hard earnings of citizens with crime-related funds from EFCC. Is unclaimed dividend crime money?” he queried.
Igburude maintained that if the government wants to expand funding for student loans, it should provide public funds rather than rely on assets belonging to private investors.
“If they want to give Nigerian students loans, they should use government money, not ordinary citizens’ assets,” he said.
Similarly, President of the New Dimension Shareholders Association, Patrick Ajudua, rejected the proposed diversion, insisting that unclaimed dividends remain fundamentally connected to shareholders and investors.
“As shareholders, I am primarily concerned with the issue of unclaimed dividend. Hence, I don’t subscribe to the diversion of unclaimed dividend to Nigerian Education Loan Fund,” Ajudua said.
He argued that funds generated by companies should, where legally permissible, remain within the companies’ custody and potentially be reinvested to generate returns for shareholders.
“Unclaimed dividend is solely for shareholders and investors in the company,” he said.
Ajudua warned that moving the funds to NELFUND could create uncertainty among investors and damage confidence in Nigeria’s capital market.
“Such an instruction to divert the fund is unjust, illegal and will lead to loss of investors’ confidence,” he said.
The controversy followed the Federal Government’s announcement of plans to establish a more sustainable funding structure for NELFUND.
Minister of Education, Tunji Alausa, had disclosed after a Federal Executive Council meeting, presided over by President Bola Tinubu at the Presidential Villa, Abuja, that the President had directed the transfer of liquid funds recovered by the EFCC to NELFUND.
According to Alausa, the directive was intended to strengthen the financing of the student-loan programme.
He, however, clarified that the order does not cover seized properties or other non-liquid assets.
The minister also said the government was considering how unclaimed dividends from the Capital Market Trust Fund and funds in the Dormant Account Trust Fund could be legally transferred to NELFUND.
Alausa said the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, would work with the ministries of finance and education as well as the Debt Management Office to examine the relevant laws establishing the two trust funds.
“That will work, and look at the existing Act that set up these two trust funds on how we can move the money legally to NELFUND,” he said.
He further stated that funds currently subject to legal disputes would not be included in any transfer.
The government’s position is based on the need to secure long-term funding for NELFUND, which has expanded its support for students across Nigerian tertiary institutions.
Alausa said more than 1.2 million students were benefiting from the scheme, while over N93bn had been disbursed as student stipends across public institutions.
He added that more than N250bn had also been released to public tertiary institutions to cover institutional fees for beneficiaries.
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While the government sees the proposed funding arrangement as a way to sustain the student-loan programme, shareholders say the issue is not simply about finding money for education.
They argue that the ownership and legal status of unclaimed dividends must be clearly established before any attempt is made to redirect the funds.
Igburude also raised concerns about government’s record in recovering funds from previous intervention programmes, questioning whether the state should rely on citizens’ assets to finance another government-backed initiative.
The shareholders’ position is expected to put further pressure on the government and regulators to clarify the legal framework surrounding unclaimed dividends, dormant accounts and the trust funds involved.
At the heart of the dispute is a clash between the government’s push to secure sustainable financing for student loans and shareholders’ demand that investors’ assets be protected.
For capital market participants, how the government resolves the issue could have wider implications for confidence in Nigeria’s investment environment, particularly among investors concerned about the protection and predictability of their assets.
