The Nation reports SEC and the NSE wants to introduce new rules that bans majority shareholders of companies from voting in EGM’s & AGM’s regarding key corporate decisions that can affect the future of the company.
According to SEC wishes decisions such as corporate takeovers, acquisitions, mergers, will only be approved by shareholders who do not own majority stakes in these companies.
I guess SEC’s decision is on the back drop of controversies that has marred some corporate decisions such as the Cadbury capital reduction scheme and the GSK capital reduction that didn’t go down well with some shareholders.
If approved this will be a major shift in the equities market and one that might affect the some major listed companies. Examples of companies that may be affected are foreign and Nigerian majority shareholders such as Alhaji Aliko Dangote, who owns majority equity stakes in Dangote Cement and Dangote Sugar Refinery; and Nestle SA, which owns controlling equity stake in Nestle Nigeria Plc will not be able to vote on some major corporate decisions affecting their companies.
Others are multinationals whi own at least 50% equity in their Nigerian subsidiaries such as Unilever Plc, GlaxoSmithKline, United Kingdom (GSK UK) Plc, PZ Cussons, Nestle SA, Lafarge SA, Heineken NV, Mondelçz International, Berger Bilfinger, BOC Holdings, Standard Bank Group, Leventis, Total SA, Mobil Oil Corporation, Siat NV, Affelka SA, Greif International Holdings B.V., United States’ Exxon Mobil Oil Corporation and SAB Miller.
Other Nigerian individual and institutional investors that may be affected included UAC of Nigeria, Vitafoam Nigeria, Dr. Oba Otudeko, Dr Mike Adenuga Jnr and Mr. Femi Otedola among others.
This is surely a move not in line with best global practices around major economies and reminds one of the indigenisation policies of the 70’s and 80’s
What do you think? Is it a good move?
Folow the link for the full article on the the Nation.