Business
NEM Insurance Plc’s 48th AGM and Associated Governance Issues
By: Nonso Okpala
A visionary and serial investor. Managing Director/CEO of VFD Group Ltd and Father-In-Chief.
An integral component of the long-term strategy of any company is corporate governance, epitomized by transparency and accountability. By extension, it is also the single most important means of sustaining the vibrancy and relevance of any capital market in the world. Furthermore, it has been observed that regulated markets with that adhere to best corporate governance practices have attracted and retained the confidence of investors, local and foreign alike.
As the CEO of VFD Group Limited, a company implementing a long-term investment strategy in the financial services industry, I basically assess companies on three cardinal points. First, the presence of a visionary and selfless leader as espoused by Jim Collins in his book, “Good to Great”. I also look for companies that have strategically positioned themselves within the context of their operating economy. These are companies that have developed a niche, either by way of technology, regulations, efficiency, etc., and established a moat around their business, as a barrier against competitors. The last cardinal point I consider is the company’s adherence to best practice in corporate governance, regardless of the local governance standards or regulatory requirements.
In the course of our operations, we have invested in a few listed companies — despite being mainly focused on private investment — and we intend to increase our capital allocation to this class of investment. One of our early investment picks was NEM Insurance Plc. The company had been a diamond in the rough for years with its market price then below N1. However, our valuation of the company, on a futuristic earning basis, was conservatively about N4 per share. This valuation has subsequently been validated by market trends; as at 21st June 2018, the market price of the stock was N3.04. We invested in the company based on our confidence in the long-term prospects of the company and its high score on our three-assessment parameters (i.e. strong leadership, strategic positioning and best practice in corporate governance) particularly the first two parameters.
NEM Insurance has a visionary leader, Tope Smart. He stands out as an extraordinary leader and is remarkably humble at it. He took on a struggling company in 2007 and bootstrapped it into one of the top five insurance companies in the industry. The company has doubled shareholders’ funds in the last five years and consistently paid dividends over the stated period. He has also built a team of remarkable lieutenants who rank as the best in the industry on a cost basis consideration.
As a result of their strategic positioning within their operating economy, the company not only enjoys the insurance regulatory environment, but has further enhanced its economic moat via efficient performance in a sector that is spectacularly known for inefficiency and poor regulatory compliance.
Unfortunately, it appears that the company is not nearly as strong on governance practices, relative to its stellar performance on the other two counts as stated above. I will elucidate with the organization of the company’s purported 2018 Annual General Meeting (AGM).
As a background, the Directors of the company collectively own less than 23.73% of the company’s issued shares. 22.98% of the 23.73% of the shares attributed to all Directors are held by four Directors (the “ruling 4”) out of ten Directors (source: NEM 2017 Annual Report & Accounts). On closer examination, the situation gets even more interesting. The same audited financial statements reveal that only 16 shareholders, inclusive of the “ruling 4” Directors, have up to 50m shares each and this group of 16 shareholders collectively controls 52.11% of the company’s issued shares. The implication is that there are 12 shareholders who collectively control 29.13% of the company’s issued shares that are not included in the management of the company. VFD Group is one of the 12 shareholders, with a 2.11% stake. In recent times, we have made efforts to identify the other 11 shareholders and observed a trend of exclusion of these shareholders from the activities of the company. For instance, as a run up to the 2018 AGM of the company, most of these shareholders did not receive notice of the meeting, the proposed special resolutions, proxy forms and audited financial statements as required by CAMA. This is extremely suspicious, particularly if one considers the special resolutions proposed for consideration and approval at the purported AGM.
First, special resolutions are usually passed by 75% of the votes of shareholders present and voting in an AGM. In the case of NEM, none of these resolutions can be passed if the 12 excluded shareholders were present and voted against the resolutions. It will be mathematically impossible because if all shareholders are in attendance, the 12 shareholders would represent 29.13% of the possible votes. This will preclude the possibility of achieving the 75% approval that is required for the resolution. This is further compounded by the fact that 100% attendance of its shareholders in NEM’s AGM is impossible. Thus, the only way to assure the passing of such resolutions (if management is not sure of the position of the 12 shareholders) is to tactically exclude them so as to ensure victory if a poll is conducted.
I am certain the question running through your head is, why go through all of these, at the risk of regulatory sanctions? Why risk the company’s reputation and particularly jeopardize the otherwise stellar achievements and track record of the Group Managing Director? The answer is simple: the company is run by a minority group of shareholders, “the ruling 4” Directors, who want to secure their hold on the company, at all costs.
The Directors, at the purported AGM, sought a resolution to issue 1.056bn shares of the company by way of private placement, at a price of N2.50. Looking closely at the proposal reveals why, in the words of former President Olusegun Obasanjo, “it is a do or die” affair for this ruling group of Directors. By maintaining the status quo and buying up shares on the floor of the stock exchange, it is currently impossible for anyone with minority holding to gain majority shareholding, and neither is it possible through fair and equitable rights’ offers. Nevertheless, the proposed special/private placement makes it possible for “the ruling 4” Directors plus the “special interest” beneficiary of the special/private placement to achieve a super majority.
Putting this in clearer context, post the proposed private placement, the collective stake of the “ruling 4” Directors plus the special interest to whom the placement shares are issued will increase to 35.82% from 22.98%. Kindly note that the provisions of the special placement gives “the ruling 4” Directors the right to pick who these shares can be allotted to. They can even allot the said shares to themselves or any one of them in the absence of any sensible checks and balances.
In truth, if the intention of the “ruling 4” Directors is to increase their interest or influence in the company, I have no fundamental objection to this goal. After all, we believe that the interest of shareholders is best served when management is significantly invested in the subject company. But the offer should nevertheless be appropriately priced. If I were to negotiate on behalf of fellow shareholders, I would place a price tag of N4 per share as I initially stated in this article and every kobo of that valuation can be justified. However, do not take my valuation as it is, let’s look to the market for the appropriate valuation of the company’s shares. The special placement is priced at N2.50 while the market price is currently N3.34 as at 27/06/18, representing a discount of 33.59%. This is clearly unusual and indicative of management’s destruction of other shareholders’ value and is designed to grant inordinate gain to an unidentified “special interest”. The question is: who will these shares be allotted to?
As an investor and specifically a shareholder of this company, VFD Group will like to participate in this offer. In fact, we will like to take up the entire offer. Why is such a compelling offer restricted to the exclusion of other shareholders who are willing and able to participate? How do you offer a significant stake of a company via a special/private placement priced at a significant discount to market?
My basic understanding of special/private placement posits the following considerations:
- That the public company cannot raise capital via rights offer.
- That the public company cannot raise capital via a public offer.
- That the company is not doing well and as such, investors are reluctant to be exposed to such company and therefore placing the company under immense capitalisation pressure.
- That the company is subject to all three above considerations and it is in dire need of funds.
If any of the above stated is the situation with NEM Insurance Plc, then the offer as proposed will be in the best interest of the company and shareholders alike. Unfortunately, this is not the case. Shareholders are willing to participate in a public or rights offer because the company is doing very well. As mentioned earlier, the Management of the company have done remarkably well based on the operations of the company and this is indicative in the current market price, profitability and industry ranking of the company. The company is also not cash-strapped; in fact, the Board proposed and obtained approval for the payment of 10k/share dividend at the purported AGM and has consistently paid dividend in the prior years. It is also not under pressure by regulators to recapitalise, as it is one of the few insurance companies that has maintained a clean bill of health. By the way, to date, no one has explained to shareholders what the funds to be raised will be utilised for.
So, what is the justification for the proposed special/private placement? What are the proceeds of the proposed offer for? If we must raise funds, why not do it via rights issue or public offer? A private placement appropriates the value in the company for the benefit of a few and savvy shareholders will have none of this.
On a general note, I will like to address the role of institutions in the pursuance of best practices in corporate governance. Their roles are integral to its attainment or otherwise. I have reviewed the activities of our corporate regulators e.g. SEC, NSE, CAC, NAICOM and others and I am extremely confident in their capacity and moral commitment to upholding global best practice standards in governance in our market. They have demonstrated this time and time again and we have no doubt that it will sustain through the foreseeable future. It is important to ensure that this governance standards are not only upheld but are seen to be upheld by all relevant parties, including NEM Insurance Plc and all auxiliary and related parties or officers of the company, such as the directors and the company secretary, as well as the Company’s Registrar, APEL Capital & Trust Limited. These parties all owe a fiduciary responsibility to all shareholders and are expected to always act in the best interests of the shareholders.
Before I conclude this piece, I will like to state a few things about VFD Group as a background to this matter, and with specific reference to our investment in NEM Insurance Plc.
- We are a Group of companies with interest/aspiration in all sectors of the financial services industry e.g. Asset Management, Bureau de Change, Banking, Microfinance, Insurance, International Remittance, Real Estate etc.
- Our operations are funded by our equity and debt investors as well as retained profit and we have been in existence for nine years. We currently have about 48 shareholders from all works of life, including leaders of public listed companies.
- We are not particularly interested in running these companies or retaining Board positions, but we are firmly interested in the proper governance of our investee companies, a strong trend of profitability and consistent payment of dividend. Once that is in place, we are delighted to support management of these companies.
- We also stand against interference with the operations of the company because we do not consider ourselves experts in our investee companies’ area of business. We believe once our set objectives are in place, we have no business interfering in their business operation.
- This article is not written with malice and as much as possible, I have ensured that it is not personal but focused purely on the facts at hand. I also owe a fiduciary responsibility to our shareholders and it behoves me to speak on their behalf and protect their interest. I also think it is in the interest of the Nigerian investing public to speak out and advocate better corporate governance. Our economy will be better off by this and similar efforts.
- We think that our interests are aligned with those of NEM Insurance Plc and that there is absolutely no need for protective schemes with the negative implication on the company.
In conclusion, I call on the Board and Management of NEM Insurance Plc to set aside the purported 48th AGM of the Company and the resolutions passed thereat. This should not be done with the mind-set of a victor or vanquished but should be done in the interest of all shareholders, majority or minority alike. I am certain that if we do the right thing by the company, all shareholders will be better for it in the long run instead of a slow and deliberate process of destruction of value that is inevitable, if we continue down this path. In the meantime, VFD Group will take all necessary lawful steps to protect its investments in NEM while supporting the company to continue its growth trajectory.
Deadline of Compliance: Nigeria’s Urgent Call for Tax Return Filing
By George Omagbemi Sylvester | Published by SaharaWeeklyNG.com
“Shift or Structural Demand? A Declaration of Civic Duty in a Nation at a Fiscal Crossroads.”
In the unfolding narrative of national development and economic reform, few instruments are as defining as tax compliance. For Nigeria, a nation perpetually grappling with revenue shortfalls, structural dependency on a single export commodity, and entrenched informal economic behaviour, the Federal Government’s recent clarification on tax return deadlines is not mere bureaucratic noise. It is a deliberate and inescapable declaration: the social contract between citizen and state must be honoured through transparent, lawful and timely tax reporting.
At its core, the government’s pronouncement is stark in its simplicity and radical in its implications. Federal authorities, speaking through the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, have made it unequivocally clear that every Nigerian, whether employer or individual taxpayer, must file annual tax returns under the law. This encompasses self-assessment filings by individuals that too many assumed ended once employers deducted pay-as-you-earn taxes from their salaries.
This is not an optional civic suggestion, it is mandatory, backed by statute, and tied to a broader vision of national fiscal responsibility. Citizens can no longer hide behind ignorance, apathy, or false assumptions. “Many people assume that if their employer deducts tax from their salaries, their obligations end there. That is wrong,” Oyedele warned, emphasizing that the obligation to file remains with the individual under both existing and newly reformed tax laws.
The Deadlines and the Reality They Reveal.
Across the federation, state and federal revenue authorities have reaffirmed statutory deadlines in pursuit of compliance. The Lagos State Internal Revenue Service, for instance, moved to extend its filing date for employer returns by a narrow window, reflecting the reality that compliance often lags behind legal timelines. The extension was intended not as leniency, but as a pragmatic effort to allow accurate and complete submissions, underscoring that true compliance rises above mere mechanical ticking of a box.
At the federal level, Oyedele’s intervention was even more fundamental. He reminded Nigerians that annual tax returns for the preceding year must be filed in good faith, with integrity and in respect of the law. This applies regardless of income level including low-income earners who have historically believed that they are outside the tax net. “All of us must file our returns, including those earning low income,” he stated.
Herein lies one of the most challenging truths of contemporary Nigerian governance: widespread tax non-compliance is not just a technical breach of law, it is a deep cultural and structural issue that reflects decades of mistrust between citizens and the state.
The Root of the Problem: Non-Compliance as a Symptom.
Nigeria’s tax culture has long been under scrutiny. Public discourse and economic analysis consistently show that a significant majority of eligible taxpayers do not file annual returns. Oyedele highlighted that even in states widely regarded as tax administration leaders, compliance remains strikingly low, often below five percent.
This widespread non-compliance stems from multiple sources:
A long history of weak tax administration systems, where enforcement was inconsistent and penalties were rarely applied.
A perception that public services do not reflect the taxes collected, eroding the citizenry’s belief in reciprocity.
An informal economy where income often goes unrecorded, making filing seem irrelevant or impossible to many.
Lack of awareness, with many Nigerians genuinely believing that tax liability ends with employer deductions.
The government’s renewed push for compliance directly challenges these perceptions. It signals a shift from voluntary or lax compliance to structured accountability, a stance that aligns with best practices in modern public finance.
Why This Matters: Beyond Deadlines.
At its most profound level, the insistence on tax return filings is about nation-building and shared responsibility.
Scholars of public finance universally agree that a robust tax system is the backbone of sustainable development. As the eminent economist Dr. Joseph E. Stiglitz has observed, “A society that cannot mobilize its own resources through fair taxation undermines both its government’s legitimacy and its capacity to provide for its people.” Filing tax returns is not a mere administrative task, it is a declaration of participation in the collective project of national advancement.
In Nigeria’s context, this declaration carries weight. With the enactment of comprehensive tax reforms in recent years (including unified frameworks for tax administration and enforcement) authorities now possess broader statutory tools to ensure compliance and accountability. These measures, which include electronic filing platforms and stronger enforcement powers, have been framed as fair and equitable, targeting efficiency rather than arbitrariness.
Yet the success of these reforms depends heavily on citizens embracing their civic duties with sincerity. And this depends on mutual trust, the belief that paying taxes yields tangible benefits in infrastructure, education, healthcare, security and social services.
Voices From Experts: Fiscal Responsibility as a Public Ethic.
Tax law experts and economists, reflecting on the compliance push, have underscored a universal theme: taxation without transparency is inequity, but taxation with accountability is empowerment. When managed with fairness, a functional tax system can reduce dependency on volatile revenue sources, stabilise national budgets, and support long-term investment in human capital.
Professor Aisha Bello, a respected authority in fiscal policy, notes that “Tax compliance is not a burden; it is the foundation upon which social contracts are built. A citizen who honours tax obligations affirms the legitimacy of governance and demands better performance in return.”
Similarly, a leading tax scholar, Dr. Emeka Okon, argues that “The era when Nigerians could evade broader tax responsibilities simply because automatic deductions occur at source must end. For a modern economy, every eligible citizen must be part of the formal tax fold not as victims, but as stakeholders.”
These authoritative voices point to an unassailable truth: filing tax returns is both a legal requirement and a moral responsibility, an expression of citizenship in its fullest sense.
Challenges on the Ground: Compliance and Capacity.
While the rhetoric of compliance is compelling, the reality on the ground demands nuanced understanding. Many taxpayers (especially in the informal sector) lack meaningful access to digital platforms and resources for filing returns. For others, the fear of bureaucratic complexity and perceived punitive enforcement deters participation.
The government, for its part, has responded by promoting online systems and pledging greater taxpayer support. Tax authorities are increasingly engaging stakeholders to demystify filing processes, explain requirements and offer assistance. This mix of enforcement and facilitation is essential. As one seasoned revenue specialist observed: “The state cannot compel compliance through force alone; it must earn it through education, simplicity and fairness.”
The Broader Implication: A New Social Compact.
Ultimately, Nigeria’s renewed emphasis on tax return filing transcends administrative deadlines. It is an unequivocal declaration that national development is a shared responsibility, that citizens and state must engage in a transparent, accountable, and reciprocal relationship.
Tax compliance, therefore, becomes far more than a legal act; it becomes a moral claim on the nation’s future.
When citizens file their returns honestly, they affirm their stake in the nation’s destiny. When the government collects taxes transparently and deploys them effectively, it strengthens not only public services but civic trust itself.
In this sense, the deadlines proclaimed by Nigeria’s fiscal authorities mark not an end but a beginning; the beginning of a civic epoch in which accountability replaces apathy, participation replaces indifference and national purpose triumphs over fragmentation.
The road ahead will not be easy. But in demanding compliance, Nigeria is demanding more than tax returns. It is demanding commitment and that, ultimately, is the foundation on which nations are built.
BUA Foods Records 91% Surge in Profit After Tax, Hits ₦508bn in 2025
By femi Oyewale
Business
Adron Homes Unveils “Love for Love” Valentine Promo with Exciting Discounts, Luxury Gifts, and Travel Rewards
Adron Homes Unveils “Love for Love” Valentine Promo with Exciting Discounts, Luxury Gifts, and Travel Rewards
In celebration of the season of love, Adron Homes and Properties has announced the launch of its special Valentine campaign, “Love for Love” Promo, a customer-centric initiative designed to reward Nigerians who choose to express love through smart, lasting real estate investments.
The Love for Love Promo offers clients attractive discounts, flexible payment options, and an array of exclusive gift items, reinforcing Adron Homes’ commitment to making property ownership both rewarding and accessible. The campaign runs throughout the Valentine season and applies to the company’s wide portfolio of estates and housing projects strategically located across Nigeria.
Speaking on the promo, the company’s Managing Director, Mrs Adenike Ajobo, stated that the initiative is aimed at encouraging individuals and families to move beyond conventional Valentine gifts by investing in assets that secure their future. According to the company, love is best demonstrated through stability, legacy, and long-term value—principles that real estate ownership represents.
Under the promo structure, clients who make a payment of ₦100,000 receive cake, chocolates, and a bottle of wine, while those who pay ₦200,000 are rewarded with a Love Hamper. Payments of ₦500,000 attract a Love Hamper plus cake, and clients who pay ₦1,000,000 enjoy a choice of a Samsung phone or a Love Hamper with cake.
The rewards become increasingly premium as commitment grows. Clients who pay ₦5,000,000 receive either an iPad or an all-expenses-paid romantic getaway for a couple at one of Nigeria’s finest hotels, which includes two nights’ accommodation, special treats, and a Love Hamper. A payment of ₦10,000,000 comes with a choice of a Samsung Z Fold 7, three nights at a top-tier resort in Nigeria, or a full solar power installation.
For high-value investors, the Love for Love Promo delivers exceptional lifestyle experiences. Clients who pay ₦30,000,000 on land are rewarded with a three-night couple’s trip to Doha, Qatar, or South Africa, while purchasers of any Adron Homes house valued at ₦50,000,000 receive a double-door refrigerator.
The promo covers Adron Homes’ estates located in Lagos, Shimawa, Sagamu, Atan–Ota, Papalanto, Abeokuta, Ibadan, Osun, Ekiti, Abuja, Nasarawa, and Niger States, offering clients the opportunity to invest in fast-growing, strategically positioned communities nationwide.
Adron Homes reiterated that beyond the incentives, the campaign underscores the company’s strong reputation for secure land titles, affordable pricing, strategic locations, and a proven legacy in real estate development.
As Valentine’s Day approaches, Adron Homes encourages Nigerians at home and in the diaspora to take advantage of the Love for Love Promo to enjoy exceptional value, exclusive rewards, and the opportunity to build a future rooted in love, security, and prosperity.
-
celebrity radar - gossips6 months agoWhy Babangida’s Hilltop Home Became Nigeria’s Political “Mecca”
-
society6 months agoPower is a Loan, Not a Possession: The Sacred Duty of Planting People
-
Business6 months agoBatsumi Travel CEO Lisa Sebogodi Wins Prestigious Africa Travel 100 Women Award
-
news6 months agoTHE APPOINTMENT OF WASIU AYINDE BY THE FEDERAL GOVERNMENT AS AN AMBASSADOR SOUNDS EMBARRASSING
You must be logged in to post a comment Login