One time Acting Director General of the Securities and Exchange Commission (SEC) Daisy Ekineh may have unwittingly dropped a bombshell when she disclosed that there were over 100 shareholder associations in the country.
Ekineh made this known at the maiden forum of Issuers & Investors Alternative Dispute Resolution Initiative (IIADRI) held in Lagos
The problem at hand: While Ekineh, may have been unwilling to be blunt, in order to come into conflict with them, she did hint at the issues with them.
“They are perceived as often seeking pecuniary benefits from companies as against ensuring good governance. The associations are also perceived as disruptive rather than disciplined at Annual General Meetings. Besides, there are too many shareholders associations, making it difficult for regulators and others to effectively engage with them,”
Little will change: The commission’s moves to bring sanity may have come in a bit too late. The multiplicity of associations mean shareholders would be unwilling to comply.
Implications: The multiplicity of associations mean they have become a means of shaking down listed firms. Shareholders seeing it as means of gaining power and influence will continue to carve out their own fiefdoms.
Shareholders suffer: Retail shareholders whose rights were meant to be protected in the first place, will be left in the cold. Companies informally would have to appease the leaders of these associations to enable them to operate smoothly.
From being bastions for the defence of shareholders, they are now derisively known as those who fight for meatpie and other takeaway gifts. Failure to attend to them leads to disruption of AGMs and other meetings.
I decided to use this medium in an effort to create a news item for follow up and possibly contact the Shareholders of AIICO to vote ‘No’ on an item in the Special Business of the AIICO Annual General Meeting to be held on Monday May 20, 2019. AIICO wants shareholders to ratify a Technical Assistance Agreement between AIICO and a company called ‘Oakwood Synergy Hub Limited’. The basis of the fee for this Technical Assistance service is not stated. This company does not even have a web presence. Think about it, a company that does not have a web presence is to give technical assistance to another that has been in existence and doing business for 49 years – since 1970.