By Dipo Olowookere
For contravening Rule 19.3 of its Rulebook, the Nigerian Stock Exchange (NSE) has fined NEM Insurance Plc, one of the insurance coys trading its shares on the local bourse.
This followed outcome of an investigative panel set up by the stock market regulators, which found the company guilty of allegations against it.
According to reports, the bourse is planning to forward its findings to the Steering Board of the Corporate Governance Rating System (CGRS), which may decide to suspend, withdraw or do nothing to the CGRS rating of NEM Insurance.
It was gathered that a major shareholder in NEM Insurance Plc, Eaton Acquisitions Limited, had written to the NSE through its solicitor, Bernateva Partners, calling for the reversal of the decisions reached at the firm’s Annual General Meeting (AGM) held at Ibadan, Oyo State in June 2018.
Apart from the complaint from Eaton Acquisitions Ltd, the NSE also received petitions against the insurer from Premium Green Limited, Starvest Limited, Three Sea Investment Limited, and Oluwaseyilola A. Ojo.
The aggrieved parties had claimed that NEM Insurance failed to notify them of the AGM in accordance with section 217 (1) of the Companies and Allied Matters Act (CAMA), SEC clause 24 and NSE rule 19.3, which prescribed at least 21 days’ notice to shareholders of an AGM to be held.
As a result of this infraction, the petitioners asked the stock market regulator to reverse the special resolution proposed and passed at the AGM to raise additional capital through a private placement at a price below the market price of NEM Insurance stock.
At the market yesterday, NEM Insurance stock closed at N2.96k per share.
It was gathered that the panel established to investigate the claims of the aggrieved shareholders discovered that NEM Insurance did not dispatch the notice of the 48th AGM and Annual Reports to them at least 21 days before the date of the meeting.
It was also found out that the shareholders who did not receive the notice of AGM were not given the opportunity to attend and exercise their voting rights in respect of any of the resolutions passed at the 48th AGM, including the proposed special resolution to raise additional capital through special/private placement.
Consequently, the NSE slammed a fine of N575,505.00 on NEM Insurance; being 50 percent of its listing fee.
The fine, according to NSE, must be paid on or before November 7, 2018 as failure to do so contravenes Clause 14(d), Appendix III: Form of General Undertaking (Equities), Rulebook of The Exchange, which stipulates a further fine of N300,000.00 in addition to N25,000.00 per day for the period of the violation.
