By Chinwendu Obienyi and Chukwuma Umeorah
A storm appears to be brewing between shareholders and companies over the continued virtual annual general meetings (AGMs) which has necessitated shareholders over different aegis calling for the review of the provision of an AGM arrangement that grants listed firms an option to hold meetings virtually in contradiction of the Companies and Allied Matters (CAMA) guidelines.
This was even as the shareholders stated that capital market regulators are lacking enthusiasm in protecting investors’ wealth and are watching the government take the lion share of their hard earned dividends from companies.
It will be recalled that shareholders had last year laid their complaints over continued virtual and proxies’ for AGMs, which made the Corporate Affairs Commission (CAC) state that the use of proxies by public companies will cease to apply effective from December 31, 2022.
Disclosing this during a one-day stakeholder’s interactive dialogue organised by the ISAN Universal Academy, the educational arm of the Independent Shareholders Association of Nigeria (ISAN) with the theme: “CAC Guidelines on Proxies AGMs of Public Companies Post COVID-19: Matters Arising in Lagos, the Registrar General at CAC, Alhaji Garba Abubakar, who was represented by the Assistant Director, Registry Department at CAC, Tolu Sonaike, said all public companies that have been granted approval to hold their AGMs using proxies are expected to do so not later than the specified date.
He stated that the guidelines on use of proxies by public companies in holding AGMs were issued to address the particular concerns during the COVID-19 pandemic and facilitate compliance by these companies with statutory obligations. He thereafter urged the companies to comply with the directive.
However, the Federal Government in a circular, stated that companies are entitled to hold their general meetings electronically provided that such meetings are conducted following the articles of the companies.
According to the shareholders who spoke to Daily Sun, this is preposterous as physical meetings remain crucial for their protection against poor management, corporate governance failure and the safety of investments.
The National Coordinator, Progressive Shareholders Association of Nigeria, Boniface Okezie, stated that the government and the companies ought to have presented the circular first to the shareholders.
He said, “I do not know what Nigerians are hiding. Since the restriction has been removed, people should come in the open to discuss. Virtual meetings alone can never work and it cannot even work in developed countries who have the working technology.
Our National Assembly is ‘copy and paste’. When they go to Europe and Asia and get the laws that are being used there, they bring them here without weighing the possibility of success.
Take the issue of unclaimed dividend, why have they not made a law to expunge it that in 100 years, an individual, his children or descendant who finds out that he has investment can claim the money. Why must it be capped at 12 years? Yet the law is still there and no one is talking about it because they are looking for free money to take to Abuja. It is really criminal of companies and even the government to rob shareholders of their rights”.
Another shareholder, Patrick Ajudua, said since the global financial crisis in 2008, investors especially in Nigeria are recounting their losses and still battling with perennial issues bedeviling the capital market.
Ajudua said, “Physical meetings, not virtual physical meetings, would allow us to engage the boards of these listed firms in achieving the objectives of the company and hold them accountable for corporate failures”.
When Daily Sun spoke to a staff (who pleaded for anonymity) of one of the listed companies during its recently AGM, he said, “It is true that the shareholders are demanding for physical AGMs but their incessant harassment of company directors led to us to stick to the COVID-19 rule”.