The Securities and Exchange Commission (SEC) has instructed NEM Insurance Plc to reconvene its 48th Annual General Meeting and give adequate notice to shareholders in accordance with the provisions of the Corporate And Allied Matters Act (CAMA) and SEC Corporate Governance Code.
Why SEC took the decision
The Commission, following its investigation of a petition from one of the company’s aggrieved shareholders, made the following observations:
- NEM failed to give the required 21 days notice to shareholders for the 48th Annual General Meeting held on June 20, 2018.
- The Company instructed its registrars Apel Capital Registrars Limited on the 8th of June 2018 to dispatch the notice of the 48th Annual General Meeting of June 20 2018.
- The registrar used a courier company not in the list of licensed courier companies in Nigeria to dispatch the notice to some shareholders in Lagos.
NEM Insurance’s action contravenes Section 217 and 221 of the CAMA 2004 and Section 24 of the SEC Corporate Governance Code of 2013.
SEC has thus resolved not to recognize the 48th Annual General Meeting (AGM) and all resolutions reached at the said meeting.
In addition, the commission has informed the Corporate Affairs Commission (CAC) of its decision and urged them to invalidate the meeting as a result of a contravention of provisions of the Corporate and Allied Matters Act of 2004.
The Nigerian Stock Exchange had late last month fined NEM Insurance Plc for contravening Rule 19.3 of its Rulebook. The rule prescribes at least 21 days notice to shareholders of an AGM to be held.
The exchange, after its findings, slammed a fine of N575,505.00 on NEM Insurance; being 50% of its listing fee. The fine, according to NSE must be paid on or before November 7, 2018.
Failure to do so will result in the company contravening Clause 14(d), Appendix III: Form of General Undertaking (Equities), Rulebook of The Exchange, which stipulates a further fine of N300,000.00 in addition to N25,000.00 per day for the period of the violation.
Key highlights of the AGM
The company during its Annual General Meeting held on the 20th of June this year at Ibadan obtained approval from its shareholders to raise N2.64 billion in a Private Placement.
NEM Insurance was to issue 1,056,000,000 ordinary shares of 50 kobo each, at N2.50.
Some shareholders, however, kicked against the exercise, stating that they did not receive notice of the meeting, the proposed special resolutions, proxy forms and audited financial statements as required by the Corporate and Allied Matters Act (CAMA).
NEM Insurance closed at N2.62 in today’s trading session on the NSE, down 4.38%
