Shareholders Reject Tinubu’s Plan To Divert Unclaimed Dividends To NELFUND

Shareholders Reject Tinubu’s Plan To Divert Unclaimed Dividends To NELFUND

President Bola Tinubu
Shareholders have rejected the Federal Government’s plan to divert unclaimed dividends from the Capital Market Trust Fund and funds in the Dormant Account Trust Fund to the Nigerian Education Loan Fund (NELFUND), describing the move as unjust and potentially damaging to investor confidence in the capital market.

The shareholders also questioned the decision to classify unclaimed dividends alongside cash recovered by the Economic and Financial Crimes Commission (EFCC), arguing that legitimate earnings belonging to investors should not be treated in the same manner as proceeds recovered from financial crimes.

The National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), Mr. Moses Igburude, described the directive as “executive rascality,” arguing that the government should protect citizens’ assets rather than appropriate them to address funding challenges.

Igburude said the decision appeared to have been made without sufficient consideration of the ownership and legal status of unclaimed dividends.

“How can the government, who is supposed to protect its citizens’ assets, be the one taking over their assets just because they need money?” he asked.

He particularly faulted what he described as the erroneous classification of legitimate earnings of shareholders alongside funds recovered from financial crimes.

 

“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?” Igburude queried.

His position reflects growing concerns among investors and capital market stakeholders over the proposed use of unclaimed dividends as a financing source for a government-backed education loan programme.

The President of the New Dimension Shareholders Association, Mr. Patrick Ajudua, also opposed the proposed diversion, stressing that his primary concern as a shareholder was the treatment of unclaimed dividends.

“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.

According to him, unclaimed dividends are fundamentally connected to shareholders and investors in the companies from which the funds originated and should therefore remain within the capital market framework.

 

He argued that companies should retain custody of such funds where legally permissible and, where appropriate, deploy them for productive purposes that could generate returns for the benefit of shareholders.

“Unclaimed dividend is solely for shareholders and investors in the company. Hence, my position is that the primary company from which the fund originates should be the custodian of such fund and ought to re-invest the fund if years have not lapsed for the growth and development of the company.
Such returns are distributed to its shareholders,” he said.

Ajudua warned that diverting the funds could undermine investor confidence, particularly at a time when Nigeria is seeking to deepen participation in the domestic capital market and attract more long-term investment.

He described the proposed transfer as unjust and potentially capable of creating uncertainty around the protection of investors’ assets.

“Such an instruction to divert the fund is unjust, illegal and will lead to loss of investors’ confidence,” he said.

The Federal Government had announced plans to strengthen the long-term financing of NELFUND by deploying cash recovered by the EFCC, alongside unclaimed dividends from the Capital Market Trust Fund and resources in the Dormant Account Trust Fund.

 

The Minister of Education, Dr. Tunji Alausa, disclosed the development while briefing State House correspondents after the Federal Executive Council meeting presided over by President Bola Ahmed Tinubu at the Presidential Villa, Abuja.
The meeting was the Council’s first sitting since June 29.

Alausa said President Tinubu had directed that all liquid funds recovered by the EFCC be transferred to NELFUND to support the sustainability of the student-loan scheme.

“The President has now directed that all funds recovered by the Economic and Financial Crimes Commission be diverted to NELFUND to continue to support its funding,” the minister said.

However, he clarified that the directive covers only liquid cash recoveries and does not extend to seized properties or other non-liquid assets.

The EFCC has separately reported recoveries of more than N566bn and $411m in monetary assets over the years, although the amount that could ultimately be transferred to NELFUND would depend on the funds that meet the conditions outlined by the government.

Alausa also disclosed that the President had directed the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, SAN, to work with the Ministry of Finance, the Ministry of Education and the Debt Management Office (DMO) to determine how the unclaimed dividend and dormant-account funds could legally be transferred.

“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, and also work with the chairman of the EFCC to look at the entire basket of recovered funds,” Alausa said.

He stressed that the directive did not cover properties seized or recovered in connection with financial crimes.

“The President was very clear: not seized properties, or recovered looted properties, but liquid funds recovered by the EFCC will now be transferred to NELFUND,” he said.

The minister further stated that funds still subject to legal challenges would be excluded from the proposed transfer.

“Every single fund that is still subject to a legal challenge will not be part of the money that will be transferred to NELFUND,” he said.

The government’s justification for the initiative is tied to the growing financial requirements of NELFUND, which has expanded significantly since its establishment to provide loans and financial support to Nigerian students in tertiary institutions.

According to Alausa, more than 1.2 million Nigerian students are currently benefiting from NELFUND, while the agency has disbursed more than N93bn in student stipends across public institutions in the country.

He added that NELFUND had also disbursed more than N250bn to public tertiary institutions to cover institutional fees for beneficiaries.

Alausa described the scheme as a major intervention in expanding access to tertiary education, arguing that a sustainable funding structure was necessary to maintain the programme over the long term.

The controversy, however, centres on whether unclaimed dividends can legally and appropriately be deployed for that purpose, given their connection to identifiable shareholders and investors.

For shareholders, the issue goes beyond the immediate availability of funds and touches on the broader principle of protecting investors’ property rights and maintaining confidence in the capital market.

Igburude also questioned the effectiveness of government-backed loan programmes in recovering funds disbursed to beneficiaries, asking whether government had a strong enough record of recovering loans and other financial interventions to justify relying on citizens’ assets to finance NELFUND.

He cited previous government intervention programmes, including the TraderMoni scheme introduced under the administration of former President Muhammadu Buhari, and questioned the extent to which funds disbursed under such initiatives had been recovered.

“If they want to give Nigerian students loans, they should use government money, not ordinary citizens’ assets,” Igburude said.

His comments underscore the concern that diverting unclaimed dividends could establish a precedent whereby private assets held within regulated financial structures are increasingly used to finance government programmes.

The shareholders’ opposition is likely to intensify scrutiny of the legal framework governing unclaimed dividends, dormant accounts and the various trust funds, particularly as the Federal Government moves to determine the mechanism through which the proposed transfers can be executed.

The government, on its part, has indicated that the relevant agencies will review the laws establishing the Capital Market Trust Fund and Dormant Account Trust Fund to determine how the proposed movement of funds can be carried out legally.

The outcome of that review could become critical to resolving the dispute, as shareholders are insisting that the government must establish a clear legal basis before deploying funds that ultimately belong to investors and other private beneficiaries.

For the capital market, stakeholders say the handling of the issue could also have implications for investor confidence, particularly foreign and domestic investors who assess the security of their assets and the predictability of regulatory and legal frameworks when making investment decisions.

The debate therefore places two competing policy objectives at the centre of the controversy: the Federal Government’s desire to establish a sustainable funding base for student loans and the need to safeguard the ownership rights of shareholders and other beneficiaries of unclaimed and dormant funds.

Capital Market Trust FundDormant Account Trust FundNigerian Education Loan Fund (NELFUND)