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Shareholders Contemplate Court Action to Stop Unclaimed Dividends Fund

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Securities and Exchange Commission (SEC)

Determined to stop the Securities and Exchange Commission (SEC) from moving unclaimed dividends of 12 years to the proposed Nigerian Capital Market Development Fund (NCMDF), some shareholders are planning a court action.

The capital market apex regulator is planning to establish the NCMDF for dividends that have been unclaimed for 12 years and above. The Companies and Allied Matters Act (CAMA) provides that unclaimed dividends for 12 years are statute barred and are returned to the companies that paid the dividends.

However, SEC has proposed a new rule on application of 12 years and above unclaimed dividends.

“All companies and registrars shall not later than 30 days after the end of every calendar year forward to the Commission a report of unclaimed dividends in their custody, which shall specify compliance with Sub Rule (1) of this Rule. Companies shall disclose details of compliance with this Rule in their annual reports,” SEC said in the rule.

According to the commission in proposing the rule, it relied on provisions of Section 313(1)(n) of the Investments and Securities Act (ISA) 2007, which gives it powers to make rules for the orderly governance of the capital market.

Although some shareholders have kicked against the rule, investigations showed that the shareholders will resort to legal action should SEC decide to go ahead with the establishment of the NCMDF.

“We have been impressed with other recent efforts made by SEC to tackle the issue of unclaimed dividends in the market. But this new plan is not acceptable to us. We have registered our feelings with the commission. But if it goes ahead with the plan, we shall stop it in the law court,” the leader of shareholders’ said on Monday.

According to him, this is an unpopular move that has failed in the past, stressing that it will fail again.

The National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, had already said his group would resist the plan, which he described as “very offensive” attempt to take their private monies.

He said SEC and other regulators have sufficient funds and avenues to mobilise resources to perform their statutory roles of market development, noting that dividends belong to shareholders and the paying companies.

Also, co-founder of Nigeria Shareholders Solidarity Association (NSSA), Alhaji Gbadebo Olatokunbo, said the plan would lead to corruption and discourage investors from the domestic market.

“Unclaimed dividends belong to shareholders who are the owners of companies and their going back to the companies after 12 years is legitimate. We respectfully call on the federal government to urgently call the regulatory agencies to order, before they add more damage to our already sick economy,” Olatokunbo said.

However, President, Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr. Faruk Umar, hailed the plan, saying it is a healthy development that would discourage sharp practices around the unclaimed dividends.

“The truth of the matter is that bulk of the unclaimed dividend that is more than 12 years belongs to people who are dead, multiple applicants who do not have bank account in their names, or small amounts of money that is not worth claiming. Someone that has not claimed his or her dividend in 12 years is unlikely to do so now. So, the Trust Fund should be established as this will discourage people from benefitting from the unclaimed dividend,” Umar said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Energy

Unlocking Investments into Africa’s Renewable Energy Market

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green energy - Investors King

The African Energy Guarantee Facility (AEGF) is launching a virtual roadshow of free webinars allowing a deeper understanding of risk issues for renewable energy projects on the continent, and conversations around risk mitigation solutions. The first webinar will take place on Thursday, 23 September from 14:30-16:00 hrs. EAT. 

The session will be oriented on how to get more energy projects from the drawing board to the grid. While the energy demand in African economies is expected to nearly double by 2040, and although the potential for renewable energy is 1,000 times larger than the demand, only 2GW out of almost 180GW of this new renewable power were added on the African continent.

Clearly not good enough! To improve the situation within the next two decades, new solutions need to be implemented urgently. De-risking and promoting private sector investments will play a crucial part of it.

In this 90-min interactive session, AEGF partners: the European Investment Bank (EIB), KfW Development Bank, Munich Re and the African Trade Insurance Agency (ATI) will share their experience and provide valuable insights on how they were able to come together and design practical solutions for investors and financiers of green energy projects in Africa aligned with SDG7 objectives.

Across Africa, the complexity of renewable energy projects and their long tenors hold back crucial energy investment. Tailored to the specific needs and risk profiles of sustain­able energy projects, AEGF will tackle the investment challenge by providing underwriting expertise and capacity tailored to market needs.

The AEGF will significantly boost private investment in sustainable energy projects, both expanding access to clean energy and contribute to achieving UN Sustainable Development Goals. The scheme supports new private sector investment in eligible renewable energy, energy efficiency and energy access projects in sub-Saharan Africa.

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Energy

Shell Signs Agreement To Sell Permian Interest For $9.5B to ConocoPhillips

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Shell profit drops 44 percent

Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has reached an agreement for the sale of its Permian business to ConocoPhillips, a leading shales developer in the basin, for $9.5 billion in cash. The transaction will transfer all of Shell’s interest in the Permian to ConocoPhillips, subject to regulatory approvals.

“After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition,” said Wael Sawan, Upstream Director. “This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”

Shell’s Upstream business plays a critical role in the Powering Progress strategy through a more focused, competitive and resilient portfolio that provides the energy the world needs today whilst funding shareholder distributions as well as the energy transition.

The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet. These distributions will be in addition to our shareholder distributions in the range of 20-30 percent of cash flow from operations. The effective date of the transaction is July 1, 2021 with closing expected in Q4 2021.

Shell has been providing energy to U.S. customers for more than 100 years and plans to remain an energy leader in the country for decades to come.

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Crude Oil

Oil Gains 1 Percent on Possible Tight Supply 

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Oil prices - Investors King

Oil prices rose on Tuesday as analysts pointed to signs of U.S. supply tightness, ending days of losses as global markets remain haunted by the potential impact on China’s economy of a crisis at heavily indebted property group China Evergrande.

Brent crude gained 95 cents or 1.3% to $74.87 a barrel by 0645 GMT, having fallen by almost 2% on Monday. The contract for West Texas Intermediate (WTI) , which expires later on Tuesday, was up 91 cents or 1.3% at $71.20 after dropping 2.3% in the previous session.

Global utilities are switching to fuel oil due to rising gas and coal prices, and lingering outages from the Gulf of Mexico after Hurricane Ada that imply less supply is available, ANZ analysts said.

“While slowing Chinese economic growth and uncertainty around the (U.S.) Fed’s tapering timetable weighed on market sentiment, other developments still point to higher oil prices,” ANZ Research said in a note.

Still, investors across financial assets have been rocked by the fallout from heavily indebted Evergrande (3333.HK) and the threat of a wider market shakeout in the longer term.

“Evergrande’s woes are threatening the outlook for the world’s second-largest economy and making some investors question China’s growth outlook and whether it is safe to invest there,” said Edward Moya, senior market analyst at OANDA.

While that view of the state of China’s economy is weighing on markets, the U.S. Federal Reserve is also expected to start tightening monetary policy – likely to make investors warier of riskier assets such as oil.

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