The Independent Shareholders Association of Nigeria (ISAN) on Friday expressed dissatisfaction at the Securities and Exchange Commission (SEC’s) proposed ban on pre-Annual General Meetings (pre-AGMs).
ISAN also condemned the commission’s planned ban on gift sharing during annual general meetings.
The association made its position known in a statement signed by its National Coordinator, Mr Adeniyi Adebisi.
A copy of the statement was obtained by the News Agency of Nigeria (NAN) in Lagos.
NAN reports that SEC is planning to create a sub-rule to regulate the conduct of AGMs.
The new sub-rule specifically seeks to reduce the cost of organising shareholders’ meetings, by making illegal, distribution of gifts to shareholders, observers and any other persons at annual and Extraordinary General Meetings (EGMs).
“AGMs and EGMs are established and administered by the provisions of the Companies and Allied Matters Act (CAMA),” he said.
He claimed that SEC had no mandate over the meetings.
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According to Adebisi SEC is expected to go to AGMs and EGMs to observe proceedings as any other observer.
“No laws or regulations proscribe giving of gifts at AGMs or EGMs.
“Any law or regulation, therefore, that seeks to prohibit these practices are simply toying with issues of fundamental rights of individuals and corporate entities.
“SEC does not define what constitutes a gift or a pre-AGM or pre-EGM. This will be opening the whole exercise to abuse, if the rule becomes operational.”
According to him, anything, even a bottle of water given to a shareholder at an AGM, can be interpreted as a gift. In like manner, a meeting of two or three persons can be construed as a pre-AGM/EGM.
“There are no judicial processes to ascertain liability. SEC will be the accuser and the judge, a clear breach of natural justice,” Adebisi said.
He noted that SEC had been running its affairs for some years without a constituted board.
“It is our belief that no responsible board will allow such amendments,” he said.
He noted that few public companies tolerated some rowdiness during AGMs and EGMs. especially during distribution of gifts.
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“It is the duty of such companies to get their axes together and do things properly,” Adebisi said.
According to the coordinator, this does not call for any regulatory action since it is not all companies that distribute gifts at the AGMs/EGMs.
“SEC did not engage all the critical stakeholders, especially shareholders, before presenting the Draft Amendment to the public; nevertheless, we are still willing to engage SEC in dialogue to achieve better understanding,” he said.
Adebisi said that equity capital market was going through a turbulent time, adding, “SEC has a responsibility to protect the interest of shareholders”.
He urged that SEC should not be seen as waging war on shareholders under any guise.
NAN reports that SEC proposed a N10 million fine against any company which will flout the rule. (NAN)
