SEC seeks mergers of shareholder groups for positive change, economic growth
This would ensure that the 125 shareholders’ associations become a force for positive change in public companies, develop the capital market and economy.
Acting Director General of SEC, Ms. Mary Uduk, stated this while addressing shareholders at the Issuers and Investors Alternative Dispute Resolution Initiative (IIADRI) yearly symposium in Lagos, at the weekend.
Represented by Mrs. Maryam Sallau, she stated that the associations, as they currently exist, were neither effective nor respected and, therefore, not taken seriously by stakeholders and quoted companies.
She, however, insisted that mergers were the only means of repositioning shareholders’ associations and improving their value for effective engagement with stakeholders.
She noted that the Securities and Exchange Board of India (SEBI) had 24 recognised investors associations, while 125 shareholders’ associations are presently recognised with more applications being processed for recognition in the country.
Uduk spoke on the theme: AGM Optimisation: The Roles of Company Secretaries, Regulators, Registrars, Auditors, Media, Shareholder Associations and other Stakeholders.
She said: “The number of shareholders’ associations recognised by SEC is growing and may soon outnumber the listed companies on the Nigerian bourse.
“In order to make shareholders’ associations stronger, more influential, effective and indeed enhance shareholders value, it is advised that some of the associations should form stronger alliances through mergers.”
She stressed that stronger and coordinated shareholders’ associations would foster protection of investors’ interest through enhanced scrutiny of companies’ activities by members of the associations.
Speaking, IIADRI Chairman, Moses Igbrude, said the organisation was borne out of a passion to entrench harmony and engender growth in the Nigerian Stock market through investors and issuers’ enlightenment on alternative dispute resolution mechanisms.
Igbrude said the association was particular about using mediation, conciliation and negotiation, as veritable tools in achieving its set goals and objectives.
Lead Speaker and Chief Executive Officer of DSE Advisory Services Limited, Ms. Daisy Ekineh, said shareholder associations, as they currently exist, were neither effective nor respected.
Ekineh said shareholders’ associations in Nigeria were perceived as often seeking pecuniary benefits from companies as against seeking good corporate governance.
“The associations are also perceived as disruptive rather than disciplined at annual general meetings (AGMs). Besides, there are too many associations, making it difficult for regulators and others to effectively engage them in meaningful dialogue.
“According to SEC records, there were over 100 CAC registered associations in 2017. To mitigate their negative activities, SEC issued a Code of Conduct to strengthen them, if they embrace it,” she stated.
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