How Companies Rip Off Nigerians With Shares: The Paper Wealth Trap

Two decades later, most of those certificates are worth less than the paper they were printed on. And the companies are richer for it.

Take the case of Comrade Prince Saviour Iche. He is both a Fidelity Bank shareholder and a Japaul shareholder, and his two experiences sum up Nigeria’s capital market tragedy.

The Fidelity Bank Shock: N5,332 in 18 Years

Iche, also known as Iche Prince Saviour, bought 1,000 units of Fidelity Bank Plc shares at N5 per share during the bank’s 2007/2008 Public Offer in Mushin, Lagos. Total investment: N5,000.

He became a registered holder on March 25, 2008, Certificate Number 683061, and then forgot about it after relocation.

Eighteen years later, he requested his statement as at September 16, 2026, from First Registrars Nigeria Limited. What he saw left him in shock.

From 2008 to 2025, covering Dividend Numbers 3 to 23, his 1,000 shares earned a total gross dividend of N5,332.50. After withholding tax, the net was N4,788.

In 18 years, his N5,000 yielded just N332 profit above his principal, an average of less than N300 per year.

The breakdown is telling: N300 gross in 2008, N50 and N25 in 2010, N140 in 2011, N140 in 2012, N210 in 2013, N140 in 2014, N180 in 2015, N160 in 2016, N140 in 2017, N110 in 2018 and 2019, N200 in 2020, N220 in 2021, N350 final and N100 interim in 2022, N400 final and N250 interim in 2023, N600 final and N850 interim in 2024, and finally N1,250 in 2025.

He bought in 2008 and did not follow up due to relocation and lack of information on claiming dividends. He now urges Fidelity Bank and other banks to intensify education on e-dividend registration.

Many retail investors who bought during the 2005-2008 offers, he says, may have similar unclaimed dividends sitting with registrars, part of the billions in unclaimed dividends regulators say are trapped in the system.

The Japaul Nightmare: 13 Years Without Dividend

If Fidelity was a shock, Japaul was an outrage.

Iche, who describes himself as “the voice of the voiceless,” said renewed interest in the capital market made him revisit his old investment in Japaul Gold and Ventures Plc, formerly Japaul Oil and Maritime Services Ltd.

After presenting his Japaul share certificates and documents to the relevant authorities, he was told the company had not paid dividend for almost 13 years.

“They said Japaul has not paid dividend for almost 13 years. They have not paid anybody dividend,” he alleged.

He said he was prepared to present his certificates if his allegations were disputed, and called on capital market regulators to investigate why shareholders who invested hard-earned money went years without returns.

“I want Nigerians to be very wise. This is what happened to me,” he said. He added that the experience had made him reconsider participating in the Dangote IPO and made him cautious about encouraging others to invest.

During his visit to the registration office, he said he met other shareholders in similar distress, including a woman trying to access her brother’s investment after being told to use the proceeds to address financial difficulties.

He also alleged that a colleague who invested in African Independent Television (AIT) was told the company was no longer paying dividends, though he provided no documents for that claim.

Iche has now called on the Economic and Financial Crimes Commission (EFCC) to investigate what he described as irregularities. “EFCC should investigate the Nigerian Stock Exchange and unravel the mystery behind giving shareholders appropriate dividends,” he said.

Japaul and the regulators are yet to respond to his allegations, but Iche insists investors deserve transparency on dividend history and corporate actions affecting their investments.

Iche’s double experience exposes the classic playbook:

1. The IPO Hype Machine

Companies flood the media with adverts. Brokers promise returns. Nigerians subscribe with savings. Between 2004 and 2008, banks and oil firms raised trillions. When the 2008 crash came, the NGX All-Share Index fell over 60%. Companies kept the cash; investors kept the losses.

2. Token Dividends and No Dividends

Fidelity paid something, but N5,332 in 18 years on N5,000 is a negative return in real terms after inflation. Japaul, according to Iche, allegedly paid nothing for 13 years. Both leave the investor poorer.

3. Bonus Shares That Mean Nothing

Instead of cash, companies offer bonus shares. You get more units, the price drops, you are no richer. The company conserves cash.

4. The Rights Issue Trap

Years later, the same company asks for more money via rights issues. Refuse and you are diluted. Accept and you throw good money after bad.

5. Unclaimed Dividends in Limbo

Regulators estimate unclaimed dividends run into billions of naira. Like Iche, millions relocated, lost mandates, or never registered for e-dividend. Registrars hold the funds while shareholders suffer.

6. Delisting: The Final Blow

After taking public money, some companies delist. Promoters offer a fraction to buy you out. Refuse and you hold untradeable paper.

The Securities and Exchange Commission (SEC) and NGX are meant to protect investors. But enforcement is weak, penalties are paltry, cases drag.

“The system is designed to protect issuers, not investors,” says an Abuja-based corporate lawyer.

Iche’s call for a probe echoes that frustration. Why would a listed company go 13 years without paying shareholders, without clear explanation to retail holders?

Until regulators force transparency, mandate e-dividends, punish non-disclosure, and empower minority shareholders, the street advice remains: “If a company wants your money for shares, hold your pocket tight.”