Fraud on Dividend warrant in Nigeria and its mitigants

1. A
PRESENTATION
CONVERSION OF DIVIDEND
WARRANT

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

11. • THANK YOU