The board of Lafarge Africa has reacted to media reports that the Securities and Exchange Commission (SEC) is investigating the firm over allegations of poor corporate practices and abuses.
In a statement published on the website of the Nigerian Stock Exchange (NSE) and signed by the Company Secretary, Adewunmi Alode, Lafarge denied ever receiving a letter from SEC that implies the firm is being investigated for any allegation.
The statement read, “We write to formally notify the Nigerian Stock Exchange, our Shareholders and the investing public, that Lafarge Africa Plc (‘Lafarge Africa’ or ‘the Company’) is not in receipt of any letter from the Securities and Exchange Commission, that would warrant the Company to believe that an investigation has been launched against it.”
Recall that The Nation in a report disclosed that it obtained evidence of several allegations of infractions and poor practices by Lafarge addressed to the Securities and Exchange Commission by the shareholders of the company in a petition.
The petition called for a forensic audit of Lafarge Africa to determine the propriety of the acquisition of Lafarge South Africa, a subsidiary of LafargeHolcim by Lafarge Africa Plc.
It also called for the subsequent sale of same Lafarge South Africa to LafargeHolcim after many years of losses that negatively impacted Lafarge Africa, amongst other issues.
The petition was reportedly written by the shareholders in a bid to verify the accuracy of the transactions in order to ensure that minority shareholders were not shortchanged. This is due to the fact that such magnitude of corporate acquisition ought to have involved comprehensive due diligence to forestall the subsequent round-tripping of assets.
Why this matters: The transactions on Lafarge South Africa were allegedly in favour of LafargeHolcim, thereby leaving Nigerian minority shareholders with reduction in shareholding and avoidable losses.
According to the report, SEC promised to look into the issue and investigate all the issues that were raised in the petition.