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NEM Insurance Plc’s 48th AGM and Associated Governance Issues

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By: Nonso Okpala

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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.

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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:

  1. That the public company cannot raise capital via rights offer.
  2. That the public company cannot raise capital via a public offer.
  3. 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.
  4. 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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.

 

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Sahara weekly online is published by First Sahara weekly international. contact saharaweekly@yahoo.com

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WEMA BANK 5 FOR 5 PROMO SEASON 3 GRAND FINALE SET TO HOLD IN LAGOS …N10,000,000 cash prize up for grabs in final draw of the season!

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WEMA BANK 5 FOR 5 PROMO SEASON 3 GRAND FINALE SET TO HOLD IN LAGOS
…N10,000,000 cash prize up for grabs in final draw of the season!

 

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Wema Bank, Nigeria’s foremost innovative bank and pioneer of Africa’s first fully digital bank, ALAT, is set to wrap up the season 3 edition of its remarkable reward initiative, the 5 for 5 Promo, in a grand finale slated for Friday, May 31, 2024, in Lagos.

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Wema Bank 5 for 5 Promo is a reward initiative introduced by the Bank in 2019 with the goal of rewarding its customers for their active loyalty to the brand and its products. Through the 5 for 5 Promo, customers of the Bank have enjoyed financial support for their personal, business and professional life. Executed via thoroughly regulated monthly draws per season, the Wema Bank 5 for 5 Promo through a raffle draw selects winners from the Bank’s pool of active and transacting customers, based on the minimum requirements and modalities of the season. A total of 1,177 customers have received cash rewards of up to N63.3 million in the first 2 seasons of the Promo; 23 of whom emerged millionaires in season 1 and 2. The 5 for 5 Promo has since become a beacon of hope to millions of Nigerians and businesses across the country.
Season 3 of the 5 for 5 Promo kickstarted in July 2023, raising the bar impressively with a N90,000,000 cash prize that surpassed both preceding seasons, creating room for more Nigerians to become winners. With each month in the 10-month spread, the 5 for 5 Promo Season 3 train has toured different locations across Nigeria, surprising customers with cash prizes ranging from N25,000 to N1,000,000 each. The 5 for 5 Promo stands out for its inclusivity, diversity and impact, touching the lives of hundreds of Nigerians of different ages, statuses, interests and inclinations. As the final draw of the season approaches, both past and aspiring 5 for 5 Promo winners eagerly anticipate the lucky 120 winners to be made this May.
Referencing the Bank’s intention for the 5 for 5 Promo, the Head, Brands & Marketing Communications at Wema Bank, Mabel Adeteye, expressed gratitude to customers of the Bank for their continued support throughout Wema Bank’s 79-year journey. “At Wema Bank, our world revolves around our people and customers. Their support is what has got us this far so it’s only natural that we seize every opportunity to give back to them and fulfil our goal of providing optimum value for every stakeholder. The 5 for 5 Promo was birthed from a place of gratitude and commitment to empowering our customers and with each season, we have simplified the requirements and amplified the rewards to ensure that everyone can benefit from the Promo. Season 3 has been nothing short of remarkable and as we close out our 79th anniversary celebration with one more 5 for 5 Promo Season 3 draw, we are honoured to be the bank of choice for our diverse customer base. To the 1,000+ customers that have won over the past 9 months and the 120 that will win in the grand finale, I say a huge congratulations. Thank you for choosing Wema Bank”.

 

 

 

Encouraging Nigerians to take advantage of the last draw of the 5 for 5 Promo Season 3, Mabel Adeteye, elucidated the minimum requirements for qualification. “The requirements are simple, fund your account with at least N5,000 and make up to 5 transactions using the ALAT App, *945# or your ALAT/Wema Card, maintaining a N5,000 minimum average account balance. It doesn’t matter where you are, what you do or when you started banking with us, you can be a winner. NYSC members have won, business owners, undergraduate students, working class professionals, everyone from Gen Z to the baby boomers—there’s room for all in the Wema Bank family and the 5 for 5 Promo. A simple download of the ALAT App could be the first step for potential winners. I look forward to May 31st, as we put the final bow on this exceptional journey that has made the 5 for 5 Promo Season 3 a success”.

 

 

 

The 5 for 5 Promo has transformed the lives and experiences of thousands of Nigerians across the world, with cash prizes for transactions on both Naira and Domiciliary accounts. With a total of N80,000,000 already disbursed in the first 9 draws of Season 3, the grand finale is set to reward 120 more Nigerians with a N10,000,000 cash prize.
To qualify to win in the grand finale of the Wema Bank 5 for 5 Promo Season 3, Wema Bank account holders are to fund their Wema/ALAT accounts and make up to 5 transactions before the month ends.

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Aviation Minister Explores Partnerships at Future Aviation Forum in Riyadh

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Aviation Minister Explores Partnerships at Future Aviation Forum in Riyadh

 

 

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The Honourable Minister of Aviation and Aerospace Development, Festus Keyamo SAN CON FCIarb (UK), is actively engaging with Middle East aviation leaders at the ongoing Future Aviation Forum in Riyadh, Saudi Arabia. Hosted at the prestigious King Abdulaziz International Conference Center (KAICC), the forum marks a pivotal moment for global aviation collaboration.

At the behest of His Excellency Jassim Saif Ahmed Al-Sulaiti, Minister of Transport of the State of Qatar, and His Excellency Saleh Al-Jasser, Minister of Transport and Logistics of the Kingdom of Saudi Arabia, the Aviation Minister convened on the sidelines to deepen ties between Nigeria and the Middle East in the realm of air transportation and logistics.

The third edition of the Future Aviation Forum, themed “Elevating Global Connectivity,” underscores the importance of fostering innovation, sustainable air travel, and cultural exchange. By bringing together leaders from the aviation sector and adjacent industries, the forum serves as a catalyst for knowledge exchange and business opportunities in a dynamic economic sector.

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Keyamo expressed gratitude to Minister Al-Sulaiti for his keen interest in Nigeria, affirming Nigeria’s openness to investment in civil aviation and other sectors of the economy. Emphasizing the importance of learning from Qatar’s success in airline operations, particularly exemplified by the global acclaim of Qatar Airways, the Minister sought collaboration to enhance Nigeria’s aviation sector.

A key proposal made by the Nigeria Aviation Minister involves encouraging Qatar Airways to patronize local catering services on its return trips to Doha from Nigeria. This initiative aligns with the principles of reciprocity outlined in the Bilateral Air Services Agreement (BASA) and aims to stimulate Nigeria’s local economy.

As the Future Aviation Forum continues until May 22, 2024, the Minister remains committed to forging strategic partnerships that will elevate Nigeria’s aviation industry on the global stage.

 

Aviation Minister Explores Partnerships at Future Aviation Forum in Riyadh

Tunde Moshood
SA Media and Communications to the Honourable Minister of Aviation and Aerospace Development

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Abba Yusuf and His Misadventure in Kano* By Aliyu Maina

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*Abba Yusuf and His Misadventure in Kano*

By Aliyu Maina

Oh, our majestic Kano! A land renowned for its rich history, resilient hustle, and unwavering hope. Alas, a dark and foreboding shadow has descended upon our beloved city, casting a pall of despair over its inhabitants. This ominous shadow is the result of a man’s broken promises and misguided leadership, a man who pledged to usher in an era of prosperity but instead unleashed unmitigated chaos upon us.

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This individual, Abba Yusuf, our governor, a stranger in our midst, callously disregards the plight of our city as it burns, his actions a stark betrayal of the trust placed in him. For the sons and daughters of Kano, the past few years have been an interminable ordeal of suffering and shattered dreams, a direct consequence of Abba Yusuf’s governance. Our once-thriving metropolis, teeming with life and commerce, has been reduced to a desolate ghost town, a mere shadow of its former vibrant self.

Abba Yusuf, a man who professed to bring prosperity, has instead inflicted upon us a reign of unrelenting hardship. He dons the guise of a leader, but beneath this façade lies a puppet manipulated by invisible forces, ensnared in a sinister political game of power and control. His actions have brought our city to its knees, leaving its people to suffer the consequences of his misguided leadership.

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As a Kano indigene, I am compelled to express my deep disappointment and anguish at the actions of Governor Abba Yusuf, who has utterly failed to prioritize the welfare of the poor masses in our beloved state. His tenure has been marked by a series of misguided decisions that have inflicted immense suffering on the very people he swore to protect.

You see, I have lived in Kano for over 50 years. I’ve seen governors come and go, each with their own vision for our beloved city. But Abba Yusuf? He’s a different breed altogether. He came in with a broom, they said, sweeping away corruption. But instead of sweeping away the dirt, he ended up uprooting the very foundations of our lives.

The first blow came barely a week into his tenure as Governor when he revoked the certificate of occupancy of several properties, claiming they had been acquired illegally from the previous administration. With nary a thought for the countless families who called these properties home, he ordered their demolition. The dust had barely settled when he delivered yet another blow – the suspension of thousands of civil servants employed by his predecessor, Gadunje, on the shaky premise of false recruitment allegations. Which has left countless families without a breadwinner. Thousands of families left jobless overnight. How do you explain that to a man who just put his children through school, hoping for a brighter future, only to see it snatched away by the stroke of a vindictive pen? This callous move has exacerbated poverty and hardship, pushing many to the brink of despair.

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The actions of Abba Yusuf have not gone unnoticed. The Federal High Court, first in Abuja and then in Kano, ordered the Kano State Government to pay hefty sums in compensation for the unlawful demolition of properties, further proving the government’s egregious violation of fundamental rights. But has he paid? Not a kobo. Court orders? Pah! Yusuf cared little for the law.

However, these court orders represent a hollow victory for the victims. They are but a small salve on the deep wound inflicted by a ruler who has lost touch with the people he promised to serve. Rather than uplift our city to the heights of prosperity he promised, Abba Yusuf has left Kano in ruins. The rubble of demolished buildings is a stark reminder of the homes and livelihoods that have been lost. People who’d saved for years, invested their life savings – their dreams turned to dust. The man who promised to clean up Kano has become the biggest stain on our city’s reputation. Thousands have been directly and indirectly affected by his actions, their lives upturned without warning or justice. Tears flow in the streets of Kano, a once proud city brought to its knees by a man lost in the labyrinth of political games. The cries of the poor and disenfranchised echo through the city, a haunting reminder of the promise of prosperity that was but a fleeting illusion.

It is a bitter pill to swallow, realizing that the man at the helm of our city’s destiny is far removed from the realities on ground. Instead of using the opportunity God has given him to guide Kano towards a brighter future, Abba Yusuf seems set on a course that only deepens our despair. In the face of this adversity, the spirit of Kano remains unbroken. Instead of using the state’s resources for the good of the people, Abba Yusuf has been busy gallivanting around, using the state’s funds to hunt down political oppositions and past administration leaders.

This, my friends, is not the Kano we know. The Kano we know, is the city that embraced all, and gave opportunities to those who strived. Yusuf has turned it into a place of fear, a place where the powerful prey on the weak. We, the ordinary people, the ones who make Kano tick – we are the ones suffering. Yusuf, blinded by his vendetta, has forgotten his duty. He’s become a puppet in a political play, more interested in settling scores than serving the people. He promised prosperity, but delivered misery. Promised hope, but brought despair.

We are a resilient people, forged in the crucible of hardship but never bowed. We continue to hope for a leader who will truly serve the interests of the masses, a leader who will lead us out of this darkness and into the light of a prosperous future. Until then, we bear witness to the misadventure of Abba Yusuf, a man clearly lost in the intricate web of politics, using his position to punish the very people he swore to serve. In the end, we, the people of Kano, are the true custodians of our city’s destiny. We will rise from these ruins, stronger and more united than ever, holding onto the hope that one day, justice will be served. Until then, we stand firm, refusing to be silenced, our voices echoing through the heart of Kano, a testament to our resilience in the face of adversity.

As a Kano person, I have witnessed firsthand the anguish and despair that Abba Yusuf’s actions have caused. His policies have punished the poor, rewarding only his political allies. We, the people of Kano, won’t stay silent. We will raise our voices, louder than the roar of the bulldozers. We will not let him turn our city into rubble. We will fight for the Kano we know and love, the Kano that gave us a future.

On behalf of the thousands of Kano people who have suffered this hardship, I say, “enough is enough”. We demand justice and an end to this misadventure, lest our beloved Kano be reduced to nothing but rubble and tears. This is our story. The story of a city betrayed. The story of a people yearning for a leader, not a destroyer. The story of Kano, waiting to rise from the ashes.

Maina, an anthropologist wrote this piece from Gidan Kofar, Kano.

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