The Nation Newspaper

Tag: Shareholders

  • SEC, NSE to block major shareholders, directors from voting at EGM, AGM

    SEC, NSE to block major shareholders, directors from voting at EGM, AGM

    Nigerian capital market regulators appear set on removing the voting powers of directors, major shareholders and other primary parties to any major corporate decisions from voting on such decisions at any meeting convened for such.

    Securities and Exchange Commission (SEC), Nigeria’s apex capital market regulator, is considering rules that will remove the voting powers of primary parties to corporate decisions, in what may give effect to earlier similar draft by the Nigerian Stock Exchange (NSE).

    The Nation earlier reported exclusively on a draft rule by the NSE, which may not allow major shareholders, directors and their related persons and institutions to vote at specially-convened meeting for significant public interest transaction that requires approval of shareholders.

    A new document on proposed new rules by SEC obtained by The Nation showed similar meanings to the NSE’s draft, although SEC’s wordings were loose.

    According to SEC’s new proposed rules on the conduct of an annual general meeting (AGM), extraordinary general meeting (EGM) and court-ordered meeting (COM), “a person-beneficiary or shareholder, in an AGM, EGM or court ordered meeting who stands to gain on a transaction to be voted at the meeting shall not be entitled to vote on the issue in which he stands to benefit,”

    SEC describes a “beneficiary” as “a person or group of persons who directly or indirectly, stand to receive benefits, profit or gain advantage in a transaction about to be voted on in an AGM, EGM or court ordered meeting”.

    The draft rules also shift the costs of convening an AGM, EGM or COM purposely for such resolutions to the beneficiary.

    “The cost and expenses incurred in convening such AGM, EGM or a court ordered meeting shall be borne by the beneficiary to the resolution passed at the meeting,” the draft stated.

    The board of directors is also required to at all times ensure that transactions relating to beneficiaries are consummated at arm’s length. Arm’s length transaction is described as a transaction made by parties freely and independently of each other, without any special relationship including members of a family or holding-subsidiary relationship having another transaction on the side or one party has complete control of the other.

    This may effectively block a holding company from voting on a major corporate decision involving any of its members while such subsidiaries may not be able to vote on a major decision involving their holding company.

    Earlier, a draft rules on “meeting convened to obtain securities holders approval” by the NSE had excluded all related and interested parties, entities, associates and proxies from exercising their voting rights, even where they hold fully-paid shares. NSE’s rules are subject to approval of SEC.

    The new draft rules by capital market regulators represent major paradigm shift from the current practice where such excluded persons and entities are allowed to exercise their voting rights and runs contrary to the general principle of one share or unit, one vote.

    In normal corporate practice, the majority core investors usually play the determining role in the constitution of board of directors and the overall direction of the company, especially in the areas of such crucial issues such as mergers, acquisitions, consolidation, dissolution and winding up and capital issues among others.

    If such majority-shareholder, major-parties barring rule is adopted, it means that foreign and Nigerian majority shareholders such as Alhaji Aliko Dangote, who owns majority equity stakes in Dangote Cement and Dangote Sugar Refinery; and Nestle SA, which owns controlling equity stake in Nestle Nigeria Plc will not be able to vote on some major corporate decisions affecting their companies.

    With the exception of GlaxoSmithKline Consumer Nigeria and Julius Berger Nigeria Plc, which hold less than majority shareholdings, all other foreign investors hold more than 50 per cent controlling majority equity stakes. The foreign investors are spread across dominant sectors of the economy with large concentration in the fast moving consumer goods (FMCGs) sector. These major multinationals include Unilever Plc, GlaxoSmithKline, United Kingdom (GSK UK) Plc, PZ Cussons, Nestle SA, Lafarge SA, Heineken NV, Mondelçz International, Berger Bilfinger, BOC Holdings, Standard Bank Group, Leventis, Total SA, Mobil Oil Corporation, Siat NV, Affelka SA, Greif International Holdings B.V., United States’ Exxon Mobil Oil Corporation and SAB Miller.

    Other Nigerian individual and institutional investors that may be affected included UAC of Nigeria, Vitafoam Nigeria, Dr. Oba Otudeko, Dr Mike Adenuga Jnr and Mr. Femi Otedola among others.

    According to the NSE’s draft, where a transaction requires the approval of investors, such approval shall be obtained either prior to the company entering into the transaction or, if completion of the transaction is expressed to be conditional on obtaining such approval, prior to the completion of the transaction.

    At the meeting, none of each related party, entity or its associate or proxy and each interested person or entity or and its associates or proxy “shall exercise any voting rights in respect of the transaction nor accept appointments as proxies” even though they are holders of fully-paid shares or unit of investment.

    Where such persons or entities are representing other unrelated or uninterested persons and entities which are qualified to vote at the meeting, their representations will only be valid if they have specific instructions as to voting, according to the new rules.

    “The notice convening the meeting shall state that related parties or interested persons shall abstain from exercising any voting rights at the meeting,” the rules stated.

    Meanwhile, all other rules relating to regulatory approval, notification, publication, documentation, venue, time, period, conduct, rights and privileges and procedures amongst others in respect of general meetings will also apply to EGMs.

    The exclusion of “each related party, entity or its associate or proxy and each interested person or entity or and its associates or proxy” from voting for their holdings appears to imply that such significant corporate decisions would be determined by the minority or non-management investors.

    In other words, only shareholders of public float shares will be allowed to vote and determine such significant corporate decisions.

    The revised listing rules of the NSE stipulates that the public shall hold a minimum of 20 per cent of each class of equity securities of a company quoted on the main board, 15 per cent of each class of equity securities of a company quoted on the Alternative Securities Market (ASeM) and 10 per cent of each class of equity securities of a dual-listed company. This rule is known in capital market parlance as public float.

    Public float is technically a synonym of public shareholder and it generally refers to the shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake, which is 5.0 per cent and above in Nigeria.

    Thus, public shareholders and public float do not include shareholders or shares held directly or indirectly by any executive, director, controlling shareholder or other concentrated, affiliated or family holdings.

    Unless where specifically outlined, “close family members” in capital market regulatory parlance globally mean spouse, parents, grandparents, biological and adopted children, step-child, brothers, sisters, spouses of biological and adopted children, step-child, brothers and sisters; grandchildren; and any such person who is financially dependent on such directors or major shareholders, who are excluded for the delineation of public float.

    Such idea of exclusion of persons and institutions with significant holdings and directorial and vested interests in a company from voting for their holdings may pitch the securities regulators against several stakeholders in the capital market.

    The Nation, in earlier report, had reported opinions of major stakeholders against such exclusion with warning that such rule will have serious unintended consequences on the growth and development of the Nigerian capital market.

  • ‘Major shareholders, related parties not to vote at EGM’

    ‘Major shareholders, related parties not to vote at EGM’

    Major shareholders, directors and their related persons and institutions may not be allowed to vote at specially-convened meeting for significant public interest transaction that requires approval of shareholders.

    New draft rules on “meeting convened to obtain securities holders approval” being finalised by the Nigerian Stock Exchange (NSE) exclude all-related and interested parties, entities, associates and proxies from exercising their voting rights, even where they hold fully-paid shares.

    The new draft rules represent major paradigm shift from the practice where such excluded persons and entities are allowed to exercise their voting rights and runs contrary to the general principle of one share or unit, one vote.

    “Meeting convened to obtain securities holders approval” in capital market parlance generally includes extra-ordinary general meeting (EGM). Many companies refer to EGM as court-ordered meeting, where such meeting requires the prior approval of a court such as meeting for consideration of scheme of merger and acquisition, which requires approval of a Federal High Court.

    Investors’ meetings are broadly classified into two categories- ordinary general meeting and extra-ordinary general meeting. Ordinary general meetings, such as annual general meeting, are held to consider ordinary businesses that entail review of operational and status reports and exchange of views by investors and directors without no change to the ownership structure or basic outlines of the company. An EGM is held to enable investors consider and approve a transaction, which usually may lead to changes in ownership or holding structure of the company as well as its basic outlines and existence. Such EGM includes meetings for new or supplementary equity or debt issuance, mergers, acquisitions, shares restructurings and delisting.

    According to the new rules, where a transaction requires the approval of investors, such approval shall be obtained either prior to the company entering into the transaction or, if completion of the transaction is expressed to be conditional on obtaining such approval, prior to the completion of the transaction.

    At the meeting, none of each related party, entity or its associate or proxy and each interested person or entity or and its associates or proxy “shall exercise any voting rights in respect of the transaction nor accept appointments as proxies” even though they are holders of fully-paid shares or unit of investment.

    Where such persons or entities are representing other unrelated or uninterested persons and entities which are qualified to vote at the meeting, their representations will only be valid if they have specific instructions as to voting, according to the new rules.

    “The notice convening the meeting shall state that related parties or interested persons shall abstain from exercising any voting rights at the meeting,” the rules stated.

    Meanwhile, all other rules relating to regulatory approval, notification, publication, documentation, venue, time, period, conduct, rights and privileges and procedures amongst others in respect of general meetings will also apply to EGMs.

    The NSE did not respond to media enquiry to provide descriptive definition of “each related party, entity or its associate or proxy and each interested person or entity or and its associates or proxy” but market sources said these refer to similar entities under the public float rule.

    The exclusion of “each related party, entity or its associate or proxy and each interested person or entity or and its associates or proxy” from voting for their holdings appears to imply that such significant corporate decisions would be determined by the minority or non-management investors.

    In other words, only shareholders of public float shares will be allowed to vote and determine such significant corporate decisions.

    The revised listing rules of the NSE stipulates that the public shall hold a minimum of 20 per cent of each class of equity securities of a company quoted on the main board, 15 per cent of each class of equity securities of a company quoted on the Alternative Securities Market (ASeM) and 10 per cent of each class of equity securities of a dual-listed company. This rule is known in capital market parlance as public float.

    Public float is technically a synonym of public shareholder and it generally refers to the shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake, which is five per cent and above in Nigeria.

    Thus, public shareholders and public float do not include shareholders or shares held directly or indirectly by any executive, director, controlling shareholder or other concentrated, affiliated or family holdings.

    Unless where specifically outlined, “close family members” in capital market regulatory parlance globally mean spouse, parents, grandparents, biological and adopted children, step-child, brothers, sisters, spouses of biological and adopted children, step-child, brothers and sisters; grandchildren; and any such person who is financially dependent on such directors or major shareholders, who are excluded for the delineation of public float.

    The new rules, which will undergo public review until next Wednesday, also empower the NSE to sanction the directors of quoted companies or securities jointly as a board and individually as a member of the authorising organ in addition to suspension of trading on such companies or securities. While the rules place a cap of N5 million on fines, a clause leaves room for the NSE to impose other forms of sanctions “which it determines to be appropriate”.

    Such idea of exclusion of persons and institutions with significant holdings and directorial and vested interests in a company from voting for their holdings may pitch the Exchange against several stakeholders in the capital market.

    The Nation, in earlier report, had reported opinions of major stakeholders against such exclusion with warning that such rule will have serious unintended consequences on the growth and development of the Nigerian capital market.

    In the United Kingdom (UK), a majority core investor- which has the major equity stake and control of management is not entitled to vote its shares in consideration of any corporate decision such as mergers, acquisitions, delisting etc, being promoted by it.

    In the wake of the move by GlaxoSmithKline UK (GSK UK) Plc to increase its shareholding in its Nigerian subsidiary, GlaxoSmithKline Consumer Nigeria (GSK Nigeria) Plc, some foreign and Nigerian stakeholders opposed to the move had clamoured for the adoption of the UK rule for the GSK Nigeria transaction. Securities and Exchange Commission (SEC) appeared to have leaned towards such position, although there was no previous provision like the UK rule in the Nigerian capital market. GSK UK, which had indicated it would vote its 46.4 per cent equity stake in favour of the deal, withdrew the offer for acquisition citing the need for further consultations with SEC and other stakeholders.

    If such majority-shareholder barring rule is adopted, it means that foreign and Nigerian majority shareholders such as Alhaji Aliko Dangote, who owns majority equity stakes in Dangote Cement and Dangote Sugar Refinery; and Nestle SA, which owns controlling equity stake in Nestle Nigeria Plc will not be able to vote on major corporate decisions affecting their companies.

    With the exception of GlaxoSmithKline Consumer Nigeria and Julius Berger Nigeria Plc, which hold less than majority shareholdings, all other foreign investors hold more than 50 per cent controlling majority equity stakes. The foreign investors are spread across dominant sectors of the economy with large concentration in the fast moving consumer goods (FMCGs) sector. These major multinationals include Unilever Plc, GlaxoSmithKline, United Kingdom (GSK UK) Plc, PZ Cussons, Nestle SA, Lafarge SA, Heineken NV, Mondelçz International, Berger Bilfinger, BOC Holdings, Standard Bank Group, Leventis, Total SA, Mobil Oil Corporation, Siat NV, Affelka SA, Greif International Holdings B.V., United States’ Exxon Mobil Oil Corporation and SAB Miller.

    Other Nigerians and institutional investors that may be affected included UAC of Nigeria, Vitafoam Nigeria, Dr. Oba Otudeko, Dr Mike Adenuga Jnr and Mr. Femi Otedola.

     

  • Shareholders to deduct infraction costs from directors’ fees

    Shareholders would seek to deduct infraction costs from the fees payable to directors of their companies where such infractions border on clearly outlined rules and regulations.

    Founding member, Nigeria Shareholders Solidarity Association, Alhaji Gbadebo Olatokunbo, who spoke to The Nation, said they would start to consider carefully the reasons for infractions and the costs related to such infractions at the annual general meeting, decrying what they described as needless infractions.

    He spoke against the background of report by the Central Bank of Nigeria (CBN) that banks were violating credit reporting rules and the decision of the apex bank to meet any further violations after the reminder and warning with severe sanctions.

    He said shareholders would hold the directors to account for any violation, especially where it was discovered that existing rules were explicit.

    According to him, the board and management are appointed by the shareholders to ensure that their companies are run under best practices and in compliance with rules.

    He pointed out that since the shareholders have the statutory mandate to fix directors’ fees at the annual general meeting, shareholders would use their votes to reduce the fees payable to directors in proportion to the infractions during the year under consideration.

    He said shareholders were aware that regulators usually issue warnings to companies before applying sanctions on subsequent defaults.

    The CBN had last week warned banks against violation of the Credit Risk Management System (CRMS), which requires all banks to report credit facilities availed to their board members and staff in the CRMS.

    The CRMS, a central database for credit information on borrowers established by the CBN Act No. 24 of 1991 (Sections 28 and 52) as amended, makes it mandatory for all banks to render returns to it in respect of all credit facilities of N1 million and above.

    The apex bank said credit facilities availed to board members and staff of banks are not exempted from the CRMS noting that the provisions of Sections 3.4 and 3.5 of the Prudential Guideline for Deposit Money Banks in Nigeria, July 2010 does not preclude banks from reporting credit facilities availed to its board members and staff in the CRMS.

    In the circular signed by Director, Banking Supervision, Central Bank of Nigeria (CBN), Mrs Tokunbo Martis, the apex banks stated that banks are required to report all credit facilities including principal and interest of N1million and above granted to their board members and staff in the CRMS as well as regularly update these credit facilities monthly.

    The apex bank stated that it henceforth, any observed breach will attract severe sanctions.

     

  • Shareholders back Sterling Bank’s N12.5b rights issue

    The ongoing right issue of Sterling Bank Plc has kicked off to a resounding success as individual retail shareholders and shareholders’ groups have indicated interests in picking up their rights and mobilising other shareholders to support the recapitalisation programme of the bank.

    A broad section of shareholders’ groups, representations and individuals interviewed in relation to the rights issue said they would pick up their rights and mobilie others to take advantage of what they described as “a window of opportunity”. Several shareholders indicated they would demand for additional shares, raising prospects of oversubscription.

    The support from non-core shareholders strengthen the prospects for the rights issue, which had earlier received firm commitments from major Nigerian and foreign shareholders including the State Bank of India, Dr. Mike Adenuga, Alhaji Suleiman Adegunwa’s Ess-ay Investments Limited and other directors.

    Sterling Bank is raising N12.5 billion through a rights issue of about 5.889 billion ordinary shares of 50 kobo each at N2.12 per share. The lender had traded at a high of N3.05 at the stock market. The shares have been pre-allotted on the basis of three new ordinary shares of 50 kobo each for every eight ordinary shares of 50 kobo each held as at May 20, 2013. The application list, which opened on June 24, 2013, will run until July 31, 2013

    According to the President, Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr. Faruk Umar, the rights issue came at the right time and at the right price. He also noted that the historic performance of the bank, as exemplified by the impressive results and dividends for the 2012 business year, has made it a toast of investors.

    “We are going to invest in the bank; the rights’ price is a bonus to shareholders because even at the market price, the bank is grossly undervalued. There is a strong possibility of a double in the price in the next two years,” Umar said.

    Leading shareholders rights’ activist, Nonah Awoh, said the board should make arrangements for oversubscription given the mood of the investors and general perception of the bank at the stock market.

    He said the profit and return forecasts of the bank, though conservative, imply a huge inflow of over 50 per cent return from dividend payments alone in five years, noting the positive relation between such huge payouts and capital gains at the stock market.

    President, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, said the rights issue would lay another strong foundation for future growth, noting that additional funds would allow the bank to increase lending to the real sector and further contribute to national economic growth.

    According to him, increased lending and expansion would lead to increased returns to shareholders.

    Noting the dividend track records of the bank, Okezie said shareholders are excited over the additional shares. He however advised against absorption of oversubscription, pointing out that excess monies should be returned.

    “I will pick my rights; it’s good for the bank and the shareholders. Additional capital would put the bank in better position to expand its operations and increase lending to the real sector. This is good for all stakeholders,” Okezie said.

    Chairman, Shareholders United Front (SUF), Mr Gbenga Idowu, said the fundamentals of the bank were attractive and there is no reason to doubt the continued growth of the bank.

    “We will support the management and the board by not only picking our rights but we will demand for extra shares,” Idowu said.

    Another shareholders’ leader, Godwin Anonoh, said his personal experience as a customer and shareholder of the bank gives him confidence to always support the bank.

    He said Sterling Bank’s track records of high dividends and the potential for capital appreciation assure investors of double returns over the years, pointing out that there is possibility the share price would more than double in a short while.

    National Coordinator, Pragmatic Shareholders Association, Mrs Bisi Bakare, said Sterling Bank ranked as one of the best stocks in terms of returns on investment, assuring that she would mobilise supports for the bank.

    “The time is right and the price is right, shareholders are getting dividends from their investments now, so we have money to invest. We will put this money in Sterling Bank,” Bakare said.

    Speaking on the prospects of the bank, National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, commended what he described as impressive performance of the bank overtime.

  • Wapic Insurance’s N3.51bn rights issue excites shareholders

    Wapic Insurance’s N3.51bn rights issue excites shareholders

    Shareholders of Wapic Insurance Plc have expressed satisfaction over the N3.51 billion rights issue being embarked on by the company, calling all the existing shareholders to take advantage of the offer to increase their holding. They observed that the profile and public perception of the underwriter has since improved following its take over by Access Bank Plc.

    Speaking on behalf of members of Renaissance Shareholders Association of Nigeria, the president, Ambassador Olufemi Timothy, said: “It is a good development. My advice to shareholders is to endeavour to take up their rights and even buy more. “You know Access Bank took over the company as a result of its take over of Intercontinental Bank, which was the parent bank. All the insurance business of Access Bank will be handled by the company and it will leverage on the good will of Access Bank to boost its business and create value for investors.

    “So, for me, it is a good buy and it is a promising company.” Wapic is offering 6.65 billion ordinary shares of 50kobo each at 55kobo per share to its existing shareholders in the ration of eight new shares for every 10 previously held. The offer opened on Monday, 10th June, 2013, and is billed to close on Friday 5th July 2013. Speaking through Taukeme Koroye, a non-executive director of the company,  Wapic’s Chairman, Aigboje Aig-Imoukhuede, explained that the rights issue was a first step towards raising additional capital for Wapic’s long-term infrastructure and expansion objectives, adding that the required endorsements from shareholders to guarantee the success of the offer has been received He added that requisite approvals have been received from the Securities and Exchange Commission, SEC, and the Nigeria Stock Exchange, NSE, while explaining that shares being offered would rank pari passu in all respects with the existing shares of the company. The Managing Director of Wapic Insurance Plc, Mr. Segun Balogun, also disclosed that plans are in top gear to ensure complete uptake of the issue. “Our shareholders are excited at the prospect of a company with a significantly robust capital base and the underwriting privileges it would confer on the company,” he added. Balogun further stated that Wapic is gradually being repositioned for growth in all aspects and lines of business, adding that the company has strengthened its capacity by restructuring its business model. It would be recalled that shareholders had on June 4, 2012, during the company’s 53rd Annual General Meeting, authorised plans by the Wapic’s board of directors to raise N5billion to boost the company’s operations. The additional funds, which shall be raised will be used amongst other things to expand operations, improve infrastructure and IT capabilities and also to inject additional capital into the company’s subsidiaries

     

  • Shareholders applaud Lafarge Wapco

    Shareholders applaud Lafarge Wapco

    A deluge of encomiums has been poured on Lafarge WAPCO Plc by shareholders in appreciating the document recently released at the end of the 2012 financial year. They were full of praises for the board of directors and the management for the company’s performance and the outcome of the year’s financial result. According to the statement from the chairman: “Domestic demand for cement in 2012 was estimated at 18.3 million metric tons, up by approximately 7% on the estimated demand for 2011, this reflects a contraction in demand compared with the last five years where years on year growth in demand averaged approximately 10.8% . The lull in demand during 2012 was principally caused by an unusually prolonged rainy season which lasted into the fourth quarter of the year, a period of dry spell when construction activities were expected to pick up. The consequent flooding in most parts of the country as a result of the heavy rainfall also meant that construction activities by major contractors and private home builders were disrupted.

    “The Nigerian economy continues to offer tremendous opportunities but the capacity of manufacturers to harness the opportunities was constrained by the prevailing challenges of the operating environment. Economic activities were paralysed at the beginning of the year due to the nationwide civil unrest which only settled after an agreement with the Nigerian Labour Congress was reached for a partial removal of the subsidy. The partial removal of subsidy on petrol and increase in food prices as a result of flooding of farm land led to a spike in inflation rate which increased to 11.9% by the end of 2012 from 10.9% at the start of the year.”

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • Shareholders praise NPF bank

    SHAREHOLDERS of the Nigeria Police Force Microfinance Bank Plc have hailed the 10 kobo dividend payment approved by the bank’s board of directors.

    At the shareholders’ forum at the weekend, they said the bank has out-paid and outperformed its peers in the financial system.

    They also commended the board, saying it has done well, especially in growing the deposit base of the bank.

    The shareholders, however, implored the management of the bank to make loans accessible by removing all the barriers to the facility.

    They also urged the board to increase the bank’s branch network by giving it even spread that reflects its ownership structure.

    “The NPF has national spread and as such we want the bank to have presence in every part of Nigeria, especially in Onitsha, Aba, Uyo, Eket.

    “This branch networking will enhance the value of the bank and also increase its deposit base,” they reasoned.

    According to them, the leap from 2 kobo dividend paid last year to 10 kobo this year is a quantum leap, urging the board to do a rights issue for the shareholders.

    The chairman of the bank, Mrs. Florence Adebanjo, said the its resilience is evidenced by its ability to raise additional capital from the initial capital of N500, 000 to almost N2billion fully paid –up shares.

    She added the impressive growth of the bank is also evident in its unit office of about 10 staff at take-off in 1993 to its current 13 locations across the nation with 271 staff strength and about 100,000 active accounts.

     

  • WAICA Re to reward shareholders

    Managing Director, WAICA Reinsurance Plc, Abiola Ekundayo has said the company’s 2012 financial accounts approved in March showed positive result.

    He said these results put the company in a position to reward its shareholders soon.

    Ekundayo, who disclosed this to reporters, stated the readiness of the company to pay its first dollar dividend in 2014. He noted that the company is discussing with EDC Limited as financial advisers to use its wide network to attract investors from across the African market to invest in WAICA Re.

    This is coming precisely two years after the establishment of the regional reinsurer.

    According to him, the company is currently operating with about $33million from her first capital raised in 2011 and is planning to shop for another $25million to shore up its operation.

    He further explained: “We want to avoid the initial mistake we made in our first offer, which concentrated only in Sierra Leone, then little in Ghana and Nigeria, so it is going to be more expansive this time.

    “The organisation has come to full operation with full support of cedents from the West African region and beyond, having also enjoyed the goodwill of WAICA Poll as offshoot. Although WAICA Pool funds are still not accessible to WAICA Re because of a few documentations on signatories, the new company has continued to meet its obligations even to the extent of claims settlement on WAICA Poll cedents.

    “Recently we paid $52,000 claims to Ghana Re from the account of WAICA Pool, which we will take back when part of its monies locked up in Union Bank of UK Limited, Commercial Bank of Ghana and some in Nigeria are accessed”.

    WAICA Reinsurance Plc, an organisation belonging to insurance companies in the West African sub-region with head office in Sierra Leone was officially commissioned in 2012 having operated skeletally in 2011.

    The firm with investors across the continent was set up to address the capacity challenge faced by the regional market in its many years of insurance practice, where foreign counterparts had controlled larger share of the market.

    Ekundayo stated that WAICA Re was established to help minimise the effects of the lack of reinsurance capacity within the West African insurance industry. He said: “With the establishment of the headquarters of WAICA Re in Sierra Leone in August 2011, the aim and objective of the corporation is to set up a world class reinsurance cooperation, which will not only capacitate staff in various companies in West Africa but also set a good example of regional socio-economic integration.”

  • Shareholders approve N81b new capital for Skye Bank

    •Shares rally N68b

    Shareholders of Skye Bank Plc yesterday overwhelmingly approved resolutions empowering the directors of the bank to raise more than N81 billion in new equity and debt capital as the bank seeks to consolidate its competitive edge within the industry.

    At the annual general meeting (AGM) of the bank in Lagos, shareholders approved a resolution to enable the board raise N50 billion in new equity funds and as much as $200 million in tier 2 capital, otherwise known as debt or quasi-debt issuance. Shareholders also empowered the board to absorb over-subscriptions, which implies the bank could access more than face target of N81 billion.

    Shareholders commended the performance of the bank citing impressive growths in all key indicators and increase in dividend payout. They approved the cash dividend of N6.6 billion, representing a dividend per share of 50 kobo.

    National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, said the bank has been consistent in ensuring good returns to shareholders.

    He however lamented what he described as untidy regulatory practices, which have been militating against banks.

    President, Nigeria Shareholders Solidarity Association (NSSA), Chief Timothy Adesiyan, applauded the improved efficiency in the bank’s operations.

    In his address, chairman, Skye Bank Plc, Mr Olatunde Ayeni said the bank posted a remarkable performance in 2012 in spite of challenges encountered during the year.

    According to him, the cost management and efficiency initiatives which were introduced early in 2012 had evident positive impact on the performance of the bank.

    He said the bank would improve on its performance in the new business year citing expected improvement in the macro economy and ongoing growth initiatives by the bank as reasons.

    Managing director, Skye Bank Plc, Mr. Kehinde Durosinmi-Etti said the bank would explore several interesting opportunities in its chosen business segments across the major sectors of the economy to bolster performance.

    According to him, with the conclusion of the divestment from all non-bank subsidiaries, the bank would now be able to focus entirely on its core mandate of financial intermediation.

    “The bank will explore new business opportunities in the existing segments of focus, while seeking new frontiers in other available sectors within the vagaries of local and international conditions. We shall continue to maintain our commitment to corporate governance, due process and professionalism,” Durosinmi-Etti said.

    He said the bank would seek to rapidly grow its operations while it will continue to be guided by the goal of creating value for shareholders and maintaining its going concern status.

    Meanwhile, Skye Bank and other 38 stocks rallied N68 billion in capital gains yesterday as the bullish rally at the Nigerian Stock Exchange (NSE) gathered momentum.

    Aggregate market capitalisation of all equities rose from its opening value of N11.842 trillion to close at N11.910 trillion. The main index, the All Share Index (ASI), also trended upward from 37,046.63 points to 37,259.91 points.

    Total Nigeria topped the gainers’ list with a gain of N11.10 to close at N170. Cadbury Nigeria followed with addition of N4.85 to close at N53.35. Mobil Oil Nigeria rose by N4 to close at N118. GlaxoSmithKline Consumer Nigeria added N3.90 to close at N52.90. Ashaka Cement gathered N2.45 to close at N27. Dangote Cement rose by N2 to close at N186 while PZ Cussons Nigeria added N1.85 to close at N54.50. Skye Bank’s share price improved by 1.39 per cent or 7.0 kobo to N5.09.

    On the downside, Nigerian Breweries led the decliners with a loss of N1.97 to close at N173.03. Julius Berger Nigeria followed with a loss of N1 to close at N55.

    Investors staked a total of N4.12 billion on 468.75 million shares in 6,224 deals. Banking stocks accounted for a turnover of 180.67 million shares worth N1.81 billion in 2111 deals. Insurance subsector recorded a turnover of 104.37 million shares worth N172.31 million in 208 deals.

  • Shareholders seek NAICOM’s intervention on fines

    Shareholders have called on the National Insurance Commission (NAICOM) to mandate insurance firms to state the reasons for which they incur fines in their financial accounts.

    This, they said, is to enable them to reduce unnecessary payments on offences that affect their investments.

    The shareholders, who were reacting to a statement by NAICOM that what ought to be their dividend were used by companies to pay avoidable fines, called on NAICOM to go beyond just asking firms to state infractions in their accounts and assist shareholders in protecting their investments, by instructing companies to give a breakdown on the penalties for which they are fined.

    The President, Nigerian Shareholders’ Renaissance Association, (NSRA) Olufemi Timothy said the documentation of reasons for fines would help shareholders know who is culpable and what should be done to stem such offence.

    He said: “It is necessary shareholders know why their companies are fined. This will enable the companies’investors to know the kind of offence committed and watch against it in the future. It will also help to determine who is culpable in the company.”

    He noted that shareholders invest their hard earned income in companies to have return on investment, adding that situations where companies’ mismanage funds entrusted to them and leave the investor to suffer, should be discouraged by government and regulators.

    National Coordinator, Pragmatic Shareholders Association of Nigeria (PSAN), Mrs Bis Bakare, called on NAICOM to go beyond reporting of infractions in yearly accounts of firms and ensure that firms state reasons for infractions to enable shareholders query them appropriately.

    She noted that shareholders had at several fora sought from their organisations reasons for delays in the presentation of their accounts, and that the firms often attribute the delay to NAICOM’s refusal to approve the accounts on time.

    She said though the law states that companies should send to the shareholders the annual accounts at least one month before the Annual General Meetings (AGM), they only get the accounts at the venue of meetings.