2. DEFINATION
Dividend is cash paid by companies to their
shareholders out of their profit in a given financial
year.
Warrant is the instrument, in form of a cheque,
used by Registrars to pay the dividend to
shareholders
When shareholder’s dividend payment details are
printed on a warrant, the warrant becomes a
dividend warrants
3. DEFINATION - CONT
Fraud is define as deliberate, trickery or cheating
with intend to gain an advantage. It is also an act
or instance of deception.
Areas where fraudulent activities are prevalent in
share registration are
i. Dividend Payment
ii. Share certificates
iii. Change of Addresses etc
4. DIVIDEND PAYMENT PROCEDURE
• Board resolution approves the payment of
dividend and AGM for ratification of the
resolution
• Blank dividend warrants are ordered from the
security printer. Encoded with details of the
paying bank
• Account is open with the bank for the purpose of
the dividend payment
• Money is received from the Company Secretary
and lodged into the dividend account.
5. DIVIDEND PAYMENT PROCEDURE -
CONT
Dividend warrants are printed and sorted
into big and small value
Small value dividend warrants are posted by
ordinary mail
Big value warrants are posted by registered
mail or by courier
6. Account Opening – Fraudsters usually open bank
account with dividend warrants with the purpose
of encashing same.
Through third party account payment. Customers
should not be allowed to pay into their accounts
dividends that are not in their names or having the
same surname
High-jacking – Dividend warrants can be stolen
from the post by friends, relation and others and
paid into bank accounts
FRAUD RELATED TO
DIVIDEND PAYMENT
7. FRAUD RELATED TO DIVIDEND
PAYMENT – CONT.
Cloning of dividend warrants - dividend warrants
can be cloned by fraudster for the purpose of
defrauding Registrars
Forging of dividend warrant- here forged dividend
warrants are presented for payment
8. Account Opening – due diligent should be taking
when opening account, either current, call or
savings.
Accounts should not be open with dividend
warrant.
Where dividend is paid into a newly open account,
withdrawal of the proceed should not be allowed
until after 6 months.
Prevention of third party payment especially from
customers that are not well known to the bank
CONTROL
9. Bank staff should understand the fixtures of a
dividend warrant
There should be effective communication between
the bank and the Registrars
Control of the postages of dividend warrants through
accredited agencies
CONTROL - CONT
10. CONCLUSION
In conclusion bank staff should be careful when
accepting dividend warrant from their customer
especially dividend with N50,000.00 and above.
Where they are in doubt about the genuineness of
the dividend warrant they should get in touch with
the Registrars