Dissenting NGX Shareholders Fault Resolutions At Company’s 61st AGM
Fred Omotara, Lagos
A class of shareholders of the NGX Group has frowned at its recently held 61st Annual General Meeting (AGM) and notified the company of its grievances through its lawyers, Messrs S. O. C. Legal represented by its Senior Partner, Oluwaseyilayo Ojo, who has commenced the pre-action protocol to set aside all resolutions at the AGM deemed illegal.
The aggrieved persons are Messrs Olayinka OIajuwon and BamideIe Ibironke, representatives of a class of shareholders of NGX Exchange Group Plc. Their concern was brought to the attention of the Chairman of the NGX Board and its Managing Director, Chief Abimbola Ogunbanjo and Mr. Oscar Onyeama respectively.
The worrying NGX shareholders have stated that the notice of the AGM issued by the company’s Company Secretary/Head of Compliance, Mojisola Adeola was ill-advised, fraudulent and fraught with illegalities and amounts to egregious abuse of privilege by the board of directors. They argued that the Notice is contrary to the Companies and Allied Matters Act (CAMA), Investment and Securities Act and other relevant capital market statutes and regulations. They also insisted that the notice and resolutions are contrary to the Board Charter of the company. According to the protesting NGX tfshareholders, the notice of the 61st AGM should not have been issued in the first place as it offends extant laws and codes of corporate governance and violates shareholder rights.
Messrs Olajuwon and Ibironke argued that the NGX Exchange Group PIc sits at the top of t he capital market, and must be held to a higher standard of compliance with law and regulations. It remains a company incorporated under the laws of the Federal Republic of Nigeria. It is definitely not above the law and must be seen to comply with the law
Some of the resolutions which the NGX 61st AGM sought to achieve, which are being contested by the aggrieved shareholders include, but are not limited to:
(i) To re-elect transitional non-executive board members of the Company to roles that have already lapsed under the terms of a Scheme of Arrangement that re-birthed the Company as a Public Limited Company (PLC);
(ii) To raise additional capital for the Company to the tune of N35, 000,000,000 (Thirty- Five Billion Naira) through a hybrid offering of equity and debt. Specifically, equity of N20billion and debt of N15billion
(III) To effectively vest upon the board of directors far reaching discretional powers and to raise capital in any manner they determine, including by way of a rights issued public offering or private placement;
(iv) To cancel existing but unissued shares of the Company and effect an amendment of the Company’s memorandum and articles to refer only to the issued shares.
The Notice further provides that attendance at the meeting shalI be by proxy onIy. The reason for this is said to be the COVID-19 guidelines issued by the Federal Government, Lagos State Government and the Corporate Affairs Commission (CAC). Accordingly, members are told to choose proxies out of 8 (eight) persons selected by the board of directors as the onIy eligible proxies from and through whom members must choose, attend and vote.
The dissenting NGX shareholders hold the view that by definition, ”capital“ of a company refers to the total assets of a business or total amount or value of its stock, which in turn is partly a function of a company’s asset worth. It is unthinkable how incurring a debt burden of @15billion for the company will translate to raising capital for the company that remains a viable, highly regarded entity in the capital market with unissued shares from which to raise capital;
They further argued that Section 340 of SEC regulations provides among others, that a public company seeking to offer securites by private placement must show evidence of dire need of fresh funds and shall satisfy the commission that the private placement remains the only viable alternative. No evidence has yet been put forward to show compliance with this provision.
According to them, “It is now public knowledge that directors of the company recently paid themselves whopping sums of money under the guise of allowances and other pecks of the office.”