Shareholders demand reversal of virtual yearly general meetings

• Say provision only tenable during COVID-19 restriction
Shareholders have called for the review of the provision of an Annual General Meeting (AGM) arrangement that grants listed firms an option to hold meetings virtually in contradiction of the Companies and Allied Matters (CAMA) guidelines.

According to the shareholders under the aegis of the New Dimension Shareholders Association of Nigeria, a new circular from the Federal Government, which stipulates that a company may hold its general meetings electronically provided that such meetings are conducted following the articles of the company is unsettling.

In a letter to the Securities and Exchange Commission (SEC), signed by the president of the association, Patrick Ajudua, the group said government has since relaxed restrictions taken to curtail the spread of COVID-19, which warranted virtual meetings.

Also, they argued that the Corporate Affairs Commission (CAC) has also reversed its guidelines on proxy AGM that required the appointment of a representative for investors not willing to attend meetings with effect from January 1, 2023.

Hence, the shareholders urged the commission to ensure that the section of the law is reviewed so that quoted companies would place priority on physical AGMs, with virtual meetings arranged alongside for investors not willing to attend.

The group insisted that the leadership of various shareholders’ groups would take necessary steps to seek relevant amendment of the section of the law, should SEC fail to do the needful.

They also pledged to ensure that their members conduct themselves in a dignified manner to enhance constructive criticisms.

According to them, shareholders must be allowed to embrace constructive criticism to foster accountability and good corporate governance in companies. This, they said, could best be achieved in a physical meeting.

They argued that years after the global financial crisis, Nigerian investors are recounting their losses even as they battle with perennial issues bedeviling the capital market.

The association insisted that physical engagements are crucial for their protection against poor management, corporate governance failure and the safety of investments.

The shareholders added that physical meetings would allow them to engage the boards of these listed firms in achieving the objectives of the company and hold them accountable for corporate failures.

Reacting to the issue, the Managing Director of Highcap Securities, David Adonri, argued that the activities of the shareholder associations had continued to add value and put pressure on companies and regulators to act in the best interest of investors.

However, he pointed out that their excesses are a cause for worry to stakeholders, as unprovoked and incessant harassment of directors and management of listed companies are among the reasons big private enterprises are not willing to be quoted.