Is Dangote Cement right in making donations to NASS and FRCN ?
Dangote cement is one of the biggest companies on the Nigerian Stock Exchange (NSE) with a market capitalization of over N2 trillion accounting for 25% of the total capitalization of the NSE. Aliko Dangote, founder of the company was a one time president of the NSE and the richest man in Nigeria according to Forbes with a networth of $12.5 billion dollars as at February 2017. Dangote cement is also the largest cement company in Nigeria with total sales volume of 15.1 metric tonnes of cement as at December 2016.
A cursory look at the Donations and Sponsorship section of the 2016 annual report by the company shows that it donated N10 million to the National Assembly committees on Capital Market and institution.
While the donations is in no way questionable, they do bring up the following observations;
- Why was the company making a donation to the National assembly committee which has its own budgetary allocation ?
- Was the donation sought by the committee or did the company donate voluntarily ?
- Will the committee be able to maintain its objectivity if it were to investigate either Dangote Cement or Alhaji Dangote ? Or any other companies run by Alhaji Dangote ?
- What was the donation used for ?
The company also made a donation of N9.4 million to the Financial Reporting Council of Nigeria (FRCN).
Similar concerns also come up here
- Why should a regulatory body which has a budgetary allocation seek donations from companies it regulates ?
- What was the purpose of the donation ?
- Will the organization be objective in matters concerning Dangote Cement or Alhaji Dangote ? Or any companies he has interest in ?
That shareholders did not raise these observations during the company’s Annual General Meeting (AGM), shows the poor level of shareholder advocacy in the country. Shareholders in the country seem to be more interested in dividends than entrenching strict corporate governance standards. While the company may not have breached Nigerian laws by the donations, in advanced climes a parliamentary committee would be censured for such an action. Same with a regulatory body. The Nigerian Stock Exchange (NSE) which should be in a position to query such an action may remain mute as it also receives donations from quoted companies it regulates. The NSE itself partnered with the company to the tune of N3 million for the 2015 edition of its essay competition.