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Chinwendu Obienyi
About N75.6billion of dividend funds belonging to about five banks are currently inaccessible to shareholders following the postponment of the Annual General Meetings (AGMs) of the institutions in Nigeria due to fears generated by the coronavirus (COVID-19)pandemic.
This comes as the final approvals for dividend distribution were put on hold as five quoted companies on the Nigerian Stock Exchange (NSE) had seemingly set schedules for shareholders annual general meeting before the President Muhammadu Buhari’s broadcast imposed a lock-down on mass gathering in parts of the country including Lagos and Abuja where such meeting usually hold. Buhari, in his address to the nation said, “All citizens in these affected states are to stay in their homes for 14 days in the first instance while travels to or from other states should be put on hold. All businesses and offices within these locations should also be fully closed during this period.
We will use this containment period to identify, trace and isolate all individuals that have come into contact with confirmed cases.”
However, one of the affected centre, Lagos State, which is Nigeria’s financial hub and home to an estimated 20 million people is where most companies annual general meetings usually hold. The state government which reported about 109 cases (as at April 5, 2020) has since shut down schools, markets, social pubs and put a restriction of not more than 25 persons on public gathering, thus foreclosing large-group assembly like churches, mosques, parties and annual general meetings.
A review of regulatory filings and corporate actions on the NSE’s website showed that all companies that had scheduled board or general meetings in the immediate period have postponed the meetings indefinitely. The reasons were the same: Coronavirus and resultant precautions of social distancing, restrictions on public gathering and logistics.
At the last count, Access Bank, Fidelity Bank, Stanbic, United Bank for Africa (UBA) and Union Bank of Nigeria (UBN) are the latest financial institutions to have postpone their meetings to check the spread of the virus.
For instance, Access Bank had set its sights on a dividend pay-out amounting up to N14.22 billion, Fidelity Bank(N5.79 billion), Stanbic (N21 billion), UBA (N27.36 billion), UBN (N7.28 billion), making a total of N75.68 billion dividend to be paid out to shareholders.
However, with the postponement of AGMs due to COVID-19 pandemic, questions are being asked as to how these shareholders who were already looking forward to getting paid to these dividends would now have to wait to till end of the crisis
SEC, NSE’s efforts
With the disruptions caused by the Covid-19, both the Securities and Exchange Commission (SEC) and NSE extended the deadline for submission of annual report and accounts by 60 days, till May 29, thus extending the waiting period for shareholders. This is because listing and regulatory rules at the capital market require all quoted companies to submit their annual audited report and financial statement, which traditionally includes final dividend recommendation, not later than 90 days after the end of the financial year. More than 85 per cent of quoted companies, including all banks, insurers, major manufacturers, oil and gas companies and conglomerates use the Gregorian calendar year ending December 31 as their business year.
