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Governance Issues Around The 48th AGM of NEM Insurance Plc – Investigation and Outcomes

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The latest decision by the Securities & Exchange Commission (SEC) on the issues relating to NEM Insurance Plc’s (NEM) 48th Annual General Meeting (AGM) held on Wednesday, 20 June 2018, at the Premier Hotel, Ibadan, Oyo State (Re: SEC Invalidates NEM Insurance Plc’s 48th AGM and Resolutions; Orders Firm to Reconvene Proper AGM) came on the back of another extensive review conducted by the Nigerian Stock Exchange (NSE) in October 2018, showing an increased level of co-ordination in the enforcement regime in the Nigerian markets.

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The Complaint(s)

Following the completion of the AGM, formal complaints were received from five (5) shareholders of NEM in June and July  2018.

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The Issues

The shareholders’ complaints can be broadly categorized into two (2) main areas:

Non-receipt of the Company’s AGM notice within the time (at least twenty-one (21) days) prescribed by Section 217(1) of the Companies and Allied Matters Act, Cap. C20 Laws of the Federation of Nigeria 2004 (CAMA);

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Special resolution proposed and passed at the AGM  to raise additional capital through special/private placement was set at a price below the market price – reversal of the special resolution proposed and passed at the AGM.

Fact Findings

The Notice of AGM was dispatched and delivered to the 1st to 4th Complainants by registered post through a private courier service on 13 June 2018, seven (7) days before the AGM. The proof of delivery was provided.

The Company claimed it dispatched the Notice of AGM to the 5th Complainant via NIPOST on 13 June 2018. The Company did not provide any proof of dispatch or delivery of the Notice to the 5th Complainant.

The Notice of AGM was published in two (2) daily newspapers, Leadership and New Telegraph Newspapers on 30 May 2018. The proof of publication was provided.

A special resolution to raise additional capital through special/private placement was proposed and passed at the AGM.

Relevant Laws and Rules:

The Companies and Allied Matters Act (CAMA) Cap C20 Laws of the Federation of Nigeria 2004

(i)   Section 217 of CAMA

“217. Length of notice for calling meetings

(1) The notice required for all types of general meetings from the commencement of this Act shall be 21 days from the date on which the notice was sent out.

(2) A general meeting of a company shall, notwithstanding that it is called by a shorter notice than that specified in subsection (1) of this section, be deemed to have been duly called if it is so agreed in the case of‐ (a) a meeting called as the annual general meeting, by all the members entitled to attend and vote thereat; and

(b) any other general meeting, by a majority in number of the members having a right to attend and vote at the meeting, being a majority together holding not less than 95 per cent in nominal value of the shares giving a right to attend and vote at the meeting or, in the case of a company not having a share capital, together representing not less than 95 per cent of the total voting rights at that meeting of all the members.

(ii)  Section 220 of CAMA

“220. Service of Notice

(1) A notice may be given by the company to any member either personally or by sending it by post to him or to his registered address, or (if he has no registered address within Nigeria) to the address, if any, supplied by him to the company for the giving of notice to him.

(2) Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying, and posting a letter containing the notice, and to have been effected in the case of a notice of a meeting at the expiration of seven days after the letter containing the same is posted, and in any other case at the time at which the letter would be delivered in the ordinary course of post.

(5) “Registered address” means, in the case of a member, any address supplied by him to the company for the giving of notice to him.”

(iii) Section 221 of CAMA

“221. Failure to give notice

(1) Failure to give notice of any meeting to a person entitled to receive it shall invalidate the meeting unless such failure is an accidental omission on the part of the person or persons giving the notice.

(2) Failure to give notice to a person entitled to it due to a misrepresentation or misinterpretation of the provisions of this Act, or of the articles, shall not amount to an accidental omission for the purposes of the foregoing subsection.”

(iv) Section 222 of CAMA

“222. Additional notice

In addition to the notice required to be given to those entitled to receive it in accordance with the provisions of this Act, every public company shall, at least 21 days before any general meeting, advertise a notice of such meeting in at least two daily newspapers.”

The Securities and Exchange Commission Consolidated Rules, 2013

(v)  Rule 99(6) of the Securities and Exchange Commission Consolidated Rules, 2013

“99.       Functions

(6)  A Registrar of a public company may dispatch annual reports and notices of general meetings

to shareholders by electronic means.”

(vi) Rule 593 of the Securities and Exchange Commission (SEC) Consolidated Rules, 2013

“593.     Service of proxy statement and proxy forms

(1)   The registrant shall furnish the proxy statement and proxy form to the shareholder together with the

notice of meeting and annual report twenty one (21) days to the date of the meeting in the case of annual general meeting (A.G.M.).

(2)   Where proxies are solicited at the expense of the company on behalf of the board, proxy forms and materials must be sent to every member of the company entitled to notice of the meeting and to vote by proxy at the meeting.

The Securities and Exchange Commission Code of Corporate Governance for Public Companies, 2011 (vii) Clause 24 of the SEC Code of Corporate Governance for Public Companies, 2011

“24. Notice of Meeting

Notices of general meetings shall be twenty-one (21) days from the date on which the notice was sent out. Companies shall allow at least seven days for service of notice if sent out by post from the day the letter containing the same is posted. The notices should include copies of documents, including annual reports and audited  financial  statements  and  other  information  as  will  enable  members  prepare  adequately  for  the meeting.”

The Rulebook of The Nigerian Stock Exchange, 2015 (Issuers’ Rules)

(viii) Rule 19.3, Rules Relating to Board Meetings and General Meetings of Issuers, Rulebook of The Exchange, 2015 (Issuers’ Rules)

“Rule 19.3: General Meetings of Members

(a)  Every Issuer shall hold sessions of the general meetings of shareholders or holders of other securities in accordance with the relevant provisions in the Companies and Allied Matters Act Cap C20 LFN (CAMA) and any other relevant legislation, these Rules and the Issuer’s Articles of Association. The Issuer shall also ensure that shareholders or holders of other securities are allowed to lawfully exercise their rights at the meetings.

(ix) Rule 19.5, Rules Relating to Board Meetings and General Meetings of Issuers, Rulebook of The Exchange, 2015 (Issuers’ Rules)

“Rule 19.5: Notice of Meeting

(a) The Board of Directors or Trustees of the Issuer shall give Notice of Meeting as provided in Rule 19.8(c) below, to each security holder to ensure that each security holder has a reasonable opportunity to attend the meeting and exercise his voting rights threat.

(b) The Notice shall state the nature of the meeting, time and venue and shall include a proxy form which shall include clearly worded resolution proposals in order that securities’ holders may be properly guided in casting their votes either for or against each resolution.”

(x)    Rule 19.8, Rules Relating to Board Meetings and General Meetings of Issuers, Rulebook of The Exchange, 2015 (Issuers’ Rules)

“(vii) Rule 19.8: Notice to be Displayed on the Website

(c) Issuers  shall ensure that  the Notice of Meeting and the full copy of the Annual Reports  or  any other relevant  documentation  are  dispatched  to  shareholders  or  holders  of  other  securities  and  the  relevant Regulatory authorities at least twenty-one (21) days before the date of the meeting and evidence of postage shall  be  made available  for  inspection by  the Regulators  at  the meeting. Where the notice is personally delivered, evidence of such delivery shall be produced. Issuers shall allow at least five (5) business days for delivery of the Notice of Meeting if sent out by post from the day the letter containing same is posted.”

Findings – Issues

Issue 1: Non-receipt of the Company’s AGM Notice

The Company did not dispatch the Notice of the 48th  AGM and Annual Reports to the shareholders at least 21 days before the date of meeting as prescribed by the CAMA, SEC Rules and the Rulebook of The Exchange.  This action of NEM  violates  Rule  19.8(vii), Rulebook of The Exchange  (Issuers’ Rules)  and Section 217(1) of CAMA stated above.

The shareholders who did not receive the Notice of AGM were not given the opportunity to attend and exercise their voting rights in respect of any of the resolutions passed at the 48th  AGM, including the proposed special resolution to raise additional capital through special/private placement.

Issue  2:  Special  resolution  proposed  and  passed  at  the  AGM  to  raise  additional  capital  through special/private placement at a price below the market price

The Exchange found that the resolution was duly proposed and passed at the AGM.

Issue 3: Reversal of the special resolution proposed and passed at the meeting

The Exchange is not the Competent Authority to invalidate the AGM pursuant to Section 221 of CAMA, for failure to give Notice of the AGM to shareholders. See, Section 221(1) of CAMA cited above. NEM as a listed entity is required to comply with the Rules of The Exchange, in addition to compliance with other relevant legislations and regulations.  For general meetings, Issuers are required to comply with the requirements of The Exchange, CAMA, and the Securities and Exchange Commission Rules and Regulations (SEC Rules) as provided in Rule 19.3 cited above.

The Exchange viewed this act of non-compliance as a corporate governance issue for a listed company which holds the Corporate Governance Rating System (CGRS) certification, and is included in The Exchange’s Corporate Governance Index (CGI), for listed companies.  CGRS  certified companies are required to demonstrate high standards of corporate governance and compliance with applicable laws and regulations.  A company’s treatment of its stakeholders, particularly its shareholders, provides incontrovertible evidence of its corporate governance practices. And, the facts in regard to the five complaints considered raise significant questions about the state of corporate governance in NEM.

Sanctions

In view of the above, The Exchange sanctioned NEM pursuant to the provisions of Rule 19.16: Sanctions, Rules Relating to Board Meetings and General Meetings of Issuers, Rulebook of The Exchange, 2015 (Issuers’ Rules) which states that:

“(a) Where an Issuer or any of its directors or any of the Trustees of a Bond contravene or fail to adhere to any of these provisions, The Exchange may censure the Issuer and/or the Issuer’s director(s) or the Trustees individually or jointly, either privately or in public.  (b) In the event of breach of any of these Rules, The Exchange shall impose the following penalties: (i) A form of censure which it determines to be appropriate; and (ii) A fine not exceeding fifty per-cent (50%) of the listing fees of the Issuer.”

Thus, the following sanctions were imposed on NEM for contravening Rule 19.8 cited above:

Private  Censure  –  The  Exchange  shall  communicate  directly  with  the  Board  of  Directors  of  NEM Insurance regarding its findings on the complaints; and

A fine of Five Hundred and Seventy-Five Thousand, Five Hundred and Five Naira only (N575,505.00), being fifty per-cent (50%) of NEM annual listing fee, on the Company.

NEM is expected to pay the fine of  N575,505.00 to The Exchange on or before close of business on Wednesday, 7 November 2018 to avoid the enforcement of the provisions of Clause 14(d), Appendix III: Form of General Undertaking (Equities), Rulebook of The Exchange, 2015 (Issuers’ Rules), which states that:

“A listed company who contravenes any of the provisions of the Listing Rules and General Undertaking and fails to pay the penalty imposed on it for such contravention on or before the due date shall be liable to a further fine of N300,000.00 in addition to N25,000 per day for the period the violation continues”.

More importantly, NEM is also required to disclose the above contravention and penalty paid in its  Annual Report and Accounts for the year ended 31 December 2018.

Additional Corporate Governance Measures

The Exchange will, as part of its own governance ethos, take steps to communicate its findings to the Steering Board of the Corporate Governance Rating System (CGRS), which may decide to suspend, withdraw or do nothing to the CGRS rating of NEM.  Please be advised that the Steering Board’s decision may affect NEM’s status as a component of the Corporate Governance Index of The Exchange.

Conclusion

NEM is one of the best performing stock in its sector on the bourse, and it is expected that lessons will (ought to) be learned from this in the future; even as it complies with the decision of the SEC communicated today,  comply with all requirements of The Exchange and that of other relevant laws and applicable rules.

The market looks forward to listed companies willing to work on their governance issues and help deliver a fair, efficient and transparent market for all investors. This is a teachable moment for NEM.

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COURT DISMISSES LAND SUIT AGAINST NIGERIAN BREWERIES

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COURT DISMISSES LAND SUIT AGAINST NIGERIAN BREWERIES

COURT DISMISSES LAND SUIT AGAINST NIGERIAN BREWERIES

 

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The Imo State High Court of Oru Judicial Division sitting at Mgbidi and presided over by his Lordship Hon. Justice Onyekachi has dismissed Suit No. HOU/71/2019, which was instituted by Chijioke Nwadika against
Nigerian Breweries Plc in the said suit, the claimant Mr. Chijioke Nwadika prayed the court to declare that the entire Ama Ogbejelem farm land at Awo-omamma in Imo State where Nigerian Breweries Plc constructed it’s drainage for waste disposal at its Awo-omamma
Breweries plant belongs to him and his family.

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COURT DISMISSES LAND SUIT AGAINST NIGERIAN BREWERIES

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The claimant also sought the court to order Nigerian Breweries Plc. to remove the drainage system from the land and pay the sum of N500,000,000 (Five Hundred Million Naira) as damages for unpaid
royalty, and destruction of the family’s economic trees as a result of disposal of waste through the drainage that runs through the claimant’s
farm land as claimed.

The claimant Mr. Chijioke Nwadika was represented through-out the
Suit by his counsel Damian Uneze Esq. who urged the court through his
submission to grant the reliefs. Dr A.A Orunkoya Esq counsel to Nigerian Breweries Plc vehemently challenged the claims of the claimant and urged the court to dismiss the suit on grounds that the
claimant failed to prove with empirical evidence the ownership of the and where Nigerian Breweries is situate or any part of it where the
drainage system of Nigerian Breweries passed.

It was his contention
that the claim of Mr. Chijioke Nwadika is predicated on tittle; hence the onus was on him to prove ownership of the land before he can be
entitled to any other relief or claim for damages connected to the land.
Dr. A.A Orunkoya Esq. further informed the court that the claim of Mr. Chijioke Nwadika was statute barred as the entire suit was centered on
a contract he purported his father had with Nigerian Breweries in 1983
whereas the action was instituted in 2019 in breach of limitation of
Action Laws that requires actions founded on breach of contract to be
instituted within six years.
The trial judge Hon. Justice Onyedikachi after considering the argument
and evidence put before the court dismissed the suit in favour of Nigerian Breweries Plc. Dr. A.A. Orunkoya Esq defence counsel to
Nigerian Breweries Plc while addressing the press after the judgment,
reiterated that the judgment has further rekindled the hope of investors and corporate organizations to invest in rural communities.

He stated that private companies are usually sued by unscrupulous
persons in their host communities thereby discouraging investors.
Dr. A.A Orunkoya Esq. further stated that the suit of Mr. chijioke
Nwadika was capable of frustrating the continuous existence of the Nigerian Breweries in Awo- Omamma but because the claims lack
merit, the court appreciated the issues of law that was canvassed as a defence and entered judgment in favour of Nigerian Breweries by dismissing the suit.

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Palliatives: Dangote donates 80,000 bags of rice to Lagos residents

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Palliatives: Dangote donates 80,000 bags of rice to Lagos residents

 … Sanwo-Olu says Dangote prioritize Nigerians’ welfare above profit

 

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The Aliko Dangote Foundation, (ADF) has flagged off the distribution of 80,000 10kg bags of rice to the vulnerable in Lagos state.

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President of Dangote Group and Chairman of the foundation, Aliko Dangote, noted that the gesture is part of the over one million 10kg bags of rice that would be distributed to reach one million vulnerable people in the 774 local government areas of the country.

 

 

 

 

Speaking at the flag off in Alausa, Dangote, said the distribution of the 80,000 bags of 10kg rice is another demonstration of the foundation’s commitment to upholding the values of compassion and solidarity that are at the core of humanity.

Noting that the distribution of the rice is in addition to the daily distribution of 12,500 loaves of bread in Lagos, Dangote stressed that with the initiative, the foundation aspires to ameliorate some of the burdens faced by vulnerable communities across Lagos State.

In his remarks, Governor of Lagos state,  Babajide Sanwo-Olu, applauded the many initiatives of Dangote to ameliorate the sufferings of Nigerians, while praiseing him for showing compassion to the needy in the society.

Sanwo-Olu said the gesture of distribution of 80,000 bags of 10kg rice shows that the leadership of the Foundation prioritize the welfare of the people beyond the pursuit of profit and accumulation of wealth.

The Governor said: “Aliko Dangote is a Nigerian that has chosen to be different. You have choices but you have made the right one which is caring for the vulnerable. I appreciate Mr. Aliko Dangote for extending his kind gestures to the people at the bottom of the pyramid and we are grateful for supporting us in government. There is a lot of global disruption in different parts of the world, and it is a tough time to be in a position of leadership,” he said.

While encouraging other wealthy Nigerians to emulate Dangote, the Governor said the distribution of the rice would support the initiative of the state in addressing the effects of the economic hardship.

Justifying the food intervention in Lagos, Dangote said: “While our traditional Ramadan food distribution has been focused on the Muslim Community, we recognize that the current circumstances where a significant proportion of Nigerians across the nation are experiencing severe hardship due to the prevailing high prices of food, require that we broaden our program to cover communities of all faiths. This is why we are extending the Ramadan initiative to cover all the thirty-six states and the Federal Capital Territory as a testament to our commitment to supporting our communities in line with our core values and the spirit of the Holy Month of Ramadan,” he said.

The CEO of the ADF, Zouera Youssoufou, said the Foundation is partnering credible NGOs, civil societies, religious bodies among others to ensure the donations go to the most vulnerable in Lagos State.

She said the Foundation is guided by a vision of empowering Africans to achieve their self-actualization and full potential as it believes that every individual, regardless of their circumstances, deserves the opportunity to thrive and succeed.

“In times of hardship, it is imperative that we stand together as one nation, one community, extending a helping hand to our brothers and sisters in their time of need as we have done with our female empowerment programme in Lagos State which targeted 40,000 (Forty thousand) disadvantaged women,” she added.

Group Executive Director Commercial Operations at Dangote Industries Limited (DIL), Fatima Aliko-Dangote, noted that the flag off in Lagos is a follow-up to the 120,000 bags distributed in Kano on Saturday, said the intervention is targeted to reach the 774 local government areas in Nigeria.

“We have been doing this for a while but we didn’t publicize  it because  our chairman  believes  this is between him and God but this year we decided  to publicize  it so that we can encourage  and inspire others to do so.

“There are many other things the Dangote foundation is also doing. We are also serving 2,500 breads all over Lagos daily. We started this in 2020 during COVID-19. Also in our hometown in Kano, we have been doing breakfast, lunch and dinner for the past 35 years. The foundation has invested in many things. Years back, we gave women some money to be able to invest in their businesses,” she said.

Speaking further, Dangote noted that Lagos state holds a special place in the hearts of the Group, hosting two of its major investments – Dangote Petroleum Refinery and Dangote Fertiliser Plant.

He disclosed that the Dangote Group is also working on the nutrition agenda and has made significant strides in food fortification, investing in iodized salt and vitamin A fortified sugar. He stressed that the Group actively promotes food fortification within the Nigerian food industry and is exploring fortification methods for staples like rice and wheat and bouillon cubes to help ensure improved nutrition nationwide.

“At the heart of the Aliko Dangote Foundation lies a deep-seated belief in the importance of nutrition in human capital development. We understand that access to nutritious food is not only a basic human right but also a critical determinant of good health and well-being. By providing these modest bags of rice to those in need, we are not only looking to alleviate immediate hunger, but also investing in the long-term health and prosperity of our communities,” he added.

While commending Lagos state governor, Babajide Sanwo Olu as a Governor with a penchant for overcoming adversity and enormous capacity in handling emergencies, Dangote urged other well-meaning individuals and corporate organisations to emulate the efforts to support the less privileged in the communities, especially during Ramadan, which is a time of self-reflection, empathy, and charity.

Palliatives: Dangote donates 80,000 bags of rice to Lagos residents

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NIFESAF ESUT Lagos Holds 4th Edition Of Business, Career Exposition

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The Lagos State Alumni Fellowship of Nigerian Fellowship of Evangelical Students (NIFESAF) has held the fourth edition of its Business and Career Exposition programme themed ‘Maximizing Technology and Strategic Customer Loyalty For Sustainable Business Growth In Today’s Economic Condition’ on Saturday, 23rd of March, 2024 in Lagos.

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The programme which was basically for Small and medium-sized enterprises since its inception has served as a major platform for the promotion of Nigerian-owned businesses and created several opportunities for SMEs to thrive and have access to the world through the global reach of NIFESAF ESUT.

Just like the previous editions, the fourth edition wasn’t any different; it featured an avalanche of exhibitions by several Nigerian businesses with guests who were ready to patronize them and a huge platform to publicize their businesses.

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Some of the businesses involved in the exhibition include Finet Mobile, Purch Gadgets, Congratulations Corporate Events, Exceptional Intensive Vocational Training, Farmskills Limited, Jigsimur health drink, De Luxe flour, Royal Almonds, Ifiefruit, Ihubest trading enterprise, K-shape fashion designer, Zara Caps and Hats, Chee Havillah Royal Services Ltd, Lowan Enterprises, Mace Ventures, Arif Bureau, Davis Exotic Homes, Whiztech Global Ltd, Earthblend flavours, to mention but a few.

Speaking at the event, the Chairman of the Global Body— Nigerian Fellowship of Evangelical Students (NIFES) ESUT Alumni Fellowship, Mr. Fred Nnadike, said the essence of the business exhibition was to support and build a community of excellent, Christians who would be role models in their respective careers.

Nnadike who urged believers under the umbrella to keep the faith alive equally charged them to uphold ethical standards, sound corporate governance, and avoid sharp practices in their respective professions and business endeavors as ardent followers of Christ.

“We want to encourage what we produce and link our entrepreneurs to the global space. SMEs are indispensable for economic growth and development. The government across board should do something urgently to revive the economy by making the environment conducive for businesses to thrive” he implored.

On his part, the Lagos State Chapter Chairman of the Fellowship, Mr Henry Nnadike, said the leadership of NIFESAF has often reminded the government that MSMEs are still the engine room of every strong economy.

“Government must address multiple taxation, epileptic power supply, dilapidated road network, and general scorching economic environment. Governments must be transparent in their reforms and interventions. Besides, we need informed ideas, programs, and policies that must be designed by the best brains. The government should learn to put the interest of the masses above their personal interest for posterity’s sake” he urged.

Similarly, the Vice Chairman of NIFESAF, Lagos Chapter, Mrs. Chika Idalah–Allison, called on the state and federal government to partner with NIFESAF and related organizations which are poised to promote skills and craftsmanship, particularly for youths.

“Government should partner with organizations promoting skills acquisition, innovation, human capital development, and creative industry. In NIFESAF we are under the mandate to support every entrepreneur under its umbrella even beyond.

Idalah – Allison told newsmen that she was able to travel to different countries for business purposes, not by her academic certifications but by the salability of her skills in artwork and design.

“Nigeria is our only country, we must build it because the world is waiting for us to step out, and that is what we must all do collaboratively, however, our education curriculum should be designed fit- for -purpose” she asserted.

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