Follow Us on Google
By Chukwuma Umeorah
Minority shareholders in Union Homes Savings and Loans Plc (UHSL), represented by the Independent Shareholders Association of Nigeria (ISAN), have accused Aso Savings and Loans (ASO) Plc of a considerable breach of corporate governance rules and asset stripping in its management of the company which it acquired in 2013. This is even as it petitioned the regulatory authorities to investigate the issue and enforce sanctions on all those found culpable.
Speaking at a press conference in Lagos on Thursday, the National Coordinator of ISAN, Igbrude Moses called out ASO for breach of the Transaction Implementation Agreement (TIA) reached with Union Bank (UBN) and UH Investment Nigeria Limited (UHNL), a special purpose vehicle set up by ASO to facilitate the transaction after it was selected as a preferred bidder in line with the Regulation of the scope of Banking Activities and Ancillary Matters No.3 issued on November 2010 by the Central Bank of Nigeria (CBN), which repealed the Universal Banking Guidelines and required banks to divest from their non-banking subsidiaries.
He said that it had become necessary for the regulatory bodies to wade into the matter to forestall what its described as ‘consequential rape of the company’ and to address the plight of minority shareholders who were suffering its effect.
ISAN therefore noted that it had, “Petitioned the Corporate Affairs Commission (CAC), Securities and Exchange Commission (SEC) and Financial Reporting Council of Nigeria (FRCN) to act swiftly and save the minority shareholders in Union Homes.”
The petition, signed by Chuks Nwachuku of Indemnity Partners, lawyers representing ISAN, noted that Significant breaches of clauses in the agreement were committed by Aso Savings citing clause 5.1.3.5 which provides that, ‘Satisfactory evidence that ASO has escrowed with a Nigeria Commercial Bank acceptable to UBN and CBN, the sum of Five billion naira only being the fresh capital that is to be injected into UHSL in consequence of the transaction outlined in the agreement.”
However, the minority shareholders alleged that ASO never paid the investment amount and has failed to do so to date and has continued to control the company and strip it of its assets and income.
It exposed the complete neglect of corporate governance rules and engaged in corporate abuse due to its failure to fulfil the provisions of the ‘Agreement’.
Furthermore, it noted that the clause 4.2.5 stating that, “The directors nominated by ASO will be appointed into the Board of Directors” was also breached as most of the nominated directors resigned leaving just two of them who cannot form a quorum for a valid meeting. Consequently, there was no board meeting throughout 2022, the petition alleged.
ISAN appealing on behalf of the minority shareholders declared that they were asking for “An investigation into the affairs of UHSL with a view to uncovering and arresting the looting of the business of the company by ASO, and in particular, by its directors, Risikat Ahmed and Richard Femi Bello and recovering all the looted funds.”
They further demanded “The prohibition of ASO from further intermediating in the affairs of UHSL and a directive that the present managers of USHL report to the FRCN until a proper board is appointed for the company,” as they appealed for a meeting of existing shareholders of the company for the purpose of electing a fresh board of directors.
On his part, the founder of ISAN and Chairman Emeritus, Sunny Nwosu stated that the interests of shareholders should be a top priority. He decried the handling of the issues by regulatory authorities even as he blamed some of its faulty policies as the major cause dissuading new investors from coming investing in the stock market.
“We have seen a lot of disrespect for shareholders, especially those who feel they are making good investments by patronizing the capital market. The young ones will not embrace the capital market with all these prevailing obnoxious policies.”
He therefore called on all shareholders to join in the effort to guard the value of their investments even as he assured that ISAN would continue to monitor the situation closely and take all necessary actions to ensure that the interest of shareholders is protected.
