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Governance Issues Around NEM Insurance 48th AGM: Investigation and Outcomes



NEM Insurance

The latest decision by the Securities and Exchange Commission (SEC) on the issues relating to NEM Insurance Plc’s (NEM) 48th Annual General Meeting (AGM) held on Wednesday, 20 June 2018, at the Premier Hotel, Ibadan, Oyo State (Re: SEC Invalidates NEM Insurance Plc’s 48th AGM and Resolutions; Orders Firm to Reconvene Proper AGM) came on the back of another extensive review conducted by the Nigerian Stock Exchange (NSE) in October 2018, showing an increased level of co-ordination in the enforcement regime in the Nigerian markets.

The Complaint(s)

Following the completion of the AGM, formal complaints were received from five (5) shareholders of NEM in June and July 2018.

The Issues

The shareholders’ complaints can be broadly categorized into two (2) main areas:

Non-receipt of the Company’s AGM notice within the time (at least twenty-one (21) days) prescribed by Section 217(1) of the Companies and Allied Matters Act, Cap. C20 Laws of the Federation of Nigeria 2004 (CAMA);

Special resolution proposed and passed at the AGM to raise additional capital through special/private placement was set at a price below the market price – reversal of the special resolution proposed and passed at the AGM.

Fact Findings

The Notice of AGM was dispatched and delivered to the 1st to 4th Complainants by registered post through a private courier service on 13 June 2018, seven (7) days before the AGM. The proof of delivery was provided.

The Company claimed it dispatched the Notice of AGM to the 5th Complainant via NIPOST on 13 June 2018. The Company did not provide any proof of dispatch or delivery of the Notice to the 5th Complainant.

The Notice of AGM was published in two (2) daily newspapers, Leadership and New Telegraph Newspapers on 30 May 2018. The proof of publication was provided.

A special resolution to raise additional capital through special/private placement was proposed and passed at the AGM.

Relevant Laws and Rules:

The Companies and Allied Matters Act (CAMA) Cap C20 Laws of the Federation of Nigeria 2004

(i)   Section 217 of CAMA

“217. Length of notice for calling meetings

(1) The notice required for all types of general meetings from the commencement of this Act shall be 21 days from the date on which the notice was sent out.

(2) A general meeting of a company shall, notwithstanding that it is called by a shorter notice than that specified in subsection (1) of this section, be deemed to have been duly called if it is so agreed in the case of‐ (a) a meeting called as the annual general meeting, by all the members entitled to attend and vote thereat; and

(b) any other general meeting, by a majority in number of the members having a right to attend and vote at the meeting, being a majority together holding not less than 95 per cent in nominal value of the shares giving a right to attend and vote at the meeting or, in the case of a company not having a share capital, together representing not less than 95 per cent of the total voting rights at that meeting of all the members.

(ii)  Section 220 of CAMA

“220. Service of Notice

(1) A notice may be given by the company to any member either personally or by sending it by post to him or to his registered address, or (if he has no registered address within Nigeria) to the address, if any, supplied by him to the company for the giving of notice to him.

(2) Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying, and posting a letter containing the notice, and to have been effected in the case of a notice of a meeting at the expiration of seven days after the letter containing the same is posted, and in any other case at the time at which the letter would be delivered in the ordinary course of post.

(5) “Registered address” means, in the case of a member, any address supplied by him to the company for the giving of notice to him.”

(iii) Section 221 of CAMA

“221. Failure to give notice

(1) Failure to give notice of any meeting to a person entitled to receive it shall invalidate the meeting unless such failure is an accidental omission on the part of the person or persons giving the notice.

(2) Failure to give notice to a person entitled to it due to a misrepresentation or misinterpretation of the provisions of this Act, or of the articles, shall not amount to an accidental omission for the purposes of the foregoing subsection.”

(iv) Section 222 of CAMA

“222. Additional notice

In addition to the notice required to be given to those entitled to receive it in accordance with the provisions of this Act, every public company shall, at least 21 days before any general meeting, advertise a notice of such meeting in at least two daily newspapers.”

The Securities and Exchange Commission Consolidated Rules, 2013

(v)  Rule 99(6) of the Securities and Exchange Commission Consolidated Rules, 2013

“99.       Functions

(6) A Registrar of a public company may dispatch annual reports and notices of general meetings to shareholders by electronic means.”

(vi) Rule 593 of the Securities and Exchange Commission (SEC) Consolidated Rules, 2013

“593.     Service of proxy statement and proxy forms

(1)   The registrant shall furnish the proxy statement and proxy form to the shareholder together with the notice of meeting and annual report twenty one (21) days to the date of the meeting in the case of annual general meeting (A.G.M.).

(2)   Where proxies are solicited at the expense of the company on behalf of the board, proxy forms and materials must be sent to every member of the company entitled to notice of the meeting and to vote by proxy at the meeting.

The Securities and Exchange Commission Code of Corporate Governance for Public Companies, 2011 (vii) Clause 24 of the SEC Code of Corporate Governance for Public Companies, 2011

“24. Notice of Meeting

Notices of general meetings shall be twenty-one (21) days from the date on which the notice was sent out. Companies shall allow at least seven days for service of notice if sent out by post from the day the letter containing the same is posted. The notices should include copies of documents, including annual reports and audited  financial  statements  and  other  information  as  will  enable  members  prepare  adequately  for  the meeting.”

The Rulebook of The Nigerian Stock Exchange, 2015 (Issuers’ Rules)

(viii) Rule 19.3, Rules Relating to Board Meetings and General Meetings of Issuers, Rulebook of The Exchange, 2015 (Issuers’ Rules)

“Rule 19.3: General Meetings of Members

(a)  Every Issuer shall hold sessions of the general meetings of shareholders or holders of other securities in accordance with the relevant provisions in the Companies and Allied Matters Act Cap C20 LFN (CAMA) and any other relevant legislation, these Rules and the Issuer’s Articles of Association. The Issuer shall also ensure that shareholders or holders of other securities are allowed to lawfully exercise their rights at the meetings.

(ix) Rule 19.5, Rules Relating to Board Meetings and General Meetings of Issuers, Rulebook of The Exchange, 2015 (Issuers’ Rules)

“Rule 19.5: Notice of Meeting

(a) The Board of Directors or Trustees of the Issuer shall give Notice of Meeting as provided in Rule 19.8(c) below, to each security holder to ensure that each security holder has a reasonable opportunity to attend the meeting and exercise his voting rights threat.

(b) The Notice shall state the nature of the meeting, time and venue and shall include a proxy form which shall include clearly worded resolution proposals in order that securities’ holders may be properly guided in casting their votes either for or against each resolution.”

(x)    Rule 19.8, Rules Relating to Board Meetings and General Meetings of Issuers, Rulebook of The Exchange, 2015 (Issuers’ Rules)

“(vii) Rule 19.8: Notice to be Displayed on the Website

(c) Issuers  shall ensure that  the Notice of Meeting and the full copy of the Annual Reports  or  any other relevant  documentation  are  dispatched  to  shareholders  or  holders  of  other  securities  and  the  relevant Regulatory authorities at least twenty-one (21) days before the date of the meeting and evidence of postage shall  be  made available  for  inspection by  the Regulators  at  the meeting. Where the notice is personally delivered, evidence of such delivery shall be produced. Issuers shall allow at least five (5) business days for delivery of the Notice of Meeting if sent out by post from the day the letter containing same is posted.”

Findings – Issues

Issue 1: Non-receipt of the Company’s AGM Notice

The Company did not dispatch the Notice of the 48th AGM and Annual Reports to the shareholders at least 21 days before the date of meeting as prescribed by the CAMA, SEC Rules and the Rulebook of The Exchange. This action of NEM violates Rule 19.8(vii), Rulebook of The Exchange (Issuers’ Rules) and Section 217(1) of CAMA stated above.

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.

Issue  2:  Special  resolution  proposed  and  passed  at  the  AGM  to  raise  additional  capital  through special/private placement at a price below the market price

The Exchange found that the resolution was duly proposed and passed at the AGM.

Issue 3: Reversal of the special resolution proposed and passed at the meeting

The Exchange is not the Competent Authority to invalidate the AGM pursuant to Section 221 of CAMA, for failure to give Notice of the AGM to shareholders. See, Section 221(1) of CAMA cited above. NEM as a listed entity is required to comply with the Rules of The Exchange, in addition to compliance with other relevant legislations and regulations.  For general meetings, Issuers are required to comply with the requirements of The Exchange, CAMA, and the Securities and Exchange Commission Rules and Regulations (SEC Rules) as provided in Rule 19.3 cited above.

The Exchange viewed this act of non-compliance as a corporate governance issue for a listed company which holds the Corporate Governance Rating System (CGRS) certification, and is included in The Exchange’s Corporate Governance Index (CGI), for listed companies.  CGRS  certified companies are required to demonstrate high standards of corporate governance and compliance with applicable laws and regulations.  A company’s treatment of its stakeholders, particularly its shareholders, provides incontrovertible evidence of its corporate governance practices. And, the facts in regard to the five complaints considered raise significant questions about the state of corporate governance in NEM.


In view of the above, The Exchange sanctioned NEM pursuant to the provisions of Rule 19.16: Sanctions, Rules Relating to Board Meetings and General Meetings of Issuers, Rulebook of The Exchange, 2015 (Issuers’ Rules) which states that:

“(a) Where an Issuer or any of its directors or any of the Trustees of a Bond contravene or fail to adhere to any of these provisions, The Exchange may censure the Issuer and/or the Issuer’s director(s) or the Trustees individually or jointly, either privately or in public.  (b) In the event of breach of any of these Rules, The Exchange shall impose the following penalties: (i) A form of censure which it determines to be appropriate; and (ii) A fine not exceeding fifty per-cent (50%) of the listing fees of the Issuer.”

Thus, the following sanctions were imposed on NEM for contravening Rule 19.8 cited above:

Private  Censure  –  The  Exchange  shall  communicate  directly  with  the  Board  of  Directors  of  NEM Insurance regarding its findings on the complaints; and

A fine of Five Hundred and Seventy-Five Thousand, Five Hundred and Five Naira only (N575,505.00), being fifty per-cent (50%) of NEM annual listing fee, on the Company.

NEM is expected to pay the fine of  N575,505.00 to The Exchange on or before close of business on Wednesday, 7 November 2018 to avoid the enforcement of the provisions of Clause 14(d), Appendix III: Form of General Undertaking (Equities), Rulebook of The Exchange, 2015 (Issuers’ Rules), which states that:

“A listed company who contravenes any of the provisions of the Listing Rules and General Undertaking and fails to pay the penalty imposed on it for such contravention on or before the due date shall be liable to a further fine of N300,000.00 in addition to N25,000 per day for the period the violation continues”.

More importantly, NEM is also required to disclose the above contravention and penalty paid in its  Annual Report and Accounts for the year ended 31 December 2018.

Additional Corporate Governance Measures

The Exchange will, as part of its own governance ethos, take steps to communicate 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.  Please be advised that the Steering Board’s decision may affect NEM’s status as a component of the Corporate Governance Index of The Exchange.


NEM is one of the best performing stock in its sector on the bourse, and it is expected that lessons will (ought to) be learned from this in the future; even as it complies with the decision of the SEC communicated today,  comply with all requirements of The Exchange and that of other relevant laws and applicable rules.

The market looks forward to listed companies willing to work on their governance issues and help deliver a fair, efficient and transparent market for all investors. This is a teachable moment for NEM.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via

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Honeywell Flour Expects Market Conditions to Remain Tough



Honeywell Flour Expects Market Conditions

By Dipo Olowookere

The Chairman of Honeywell Flour Mills Plc, Mr Oba Otudeko, says he expects market conditions to remain tough, though he sees the company coming out stronger.

Business Post reports that businesses in Nigeria are battling with a tough operating environment as the benchmark interest rate is at 11.5 per cent, with the inflation as of September 2021 at 16.63 per cent, low purchasing power of consumers and foreign exchange (FX) scarcity, which has put the Naira to Dollar exchange rate at N570/$1 at the parallel market, though it traded at N414.07/$1 at the Investors and Exporters (I&E) segment on Wednesday.

Addressing shareholders at the recent Annual General Meeting (AGM) of the firm in Lagos, the industrialist said these problems and others forced the organisation to design a 10-year strategy aimed to expand the portfolios of the company.

According to him, Honeywell Flour will make investments in technology and come up with products that will excite consumers within the period to drive growth and profitability.

“We expect market conditions to remain tough,” Mr Otudeko informed some investors present at the gathering, but assured them that, “We are adapting to this new reality by executing with speed in order to deliver competitive returns and meet the needs of our multiple stakeholders.”

“We are committed to investing in the capabilities we need, the know-how and the talent to continue to create value,” he further assured.

He recalled how the company navigated through the COVID-19 pandemic last year and “delivered a strong performance” by “working collaboratively towards the execution of our corporate goals, guided by clear priorities; keeping our people safe and motivated, ensuring the supply of our food products to consumers across the length and breadth of the country, and caring for the communities where we operate.”

The Managing Director of Honeywell Flour, Mr Lanre Jaiyeola, in his presentation, said in the fiscal year, the company “achieved record production and sales volumes driven by consumer food products which also achieved record sales volume.”

He also assured shareholders that the board and management “will continue to focus on our competitive advantage and improve our product offerings in order to exceed our consumers’ expectations while increasing market share, and delivering value to our shareholders.”

Commenting on the new plan, Mr Jaiyeola disclosed that it “will see Honeywell Flour Mills transition to become Honeywell Foods.”

“Our aim is to offer a portfolio of food products manufactured from a wide range of raw materials drawn from local sources that offer good nutrition and contribute to a healthier and balanced life.

“Our aim also aligns with the Federal Government’s commitment to achieving the United Nation’s 2030 Agenda of Sustainable Development Goals that seeks to ensure access to safe, nutritious and sufficient food,” he explained at the yearly shareholders’ event held precisely on Thursday, October 14, 2021, at the Civic Centre, Victoria Island.

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Minister Tasks Port Officers on Professional Discharge of Duties



port officers

By Adedapo Adesanya

The Minister of Transportation, Mr Rotimi Amaechi, has charged Port State Control Officers (PSCOs) to display a high level of professionalism in carrying out their duties of inspecting foreign ships at national ports.

Mr Amaechi said this in a statement signed by the Director of Press and Public Relations of the Ministry, Mr Eric Ojiekwe.

He spoke at the 11th Port State Control Committee (PSC) Meeting of the Memorandum of Understanding (MoU) on PSC for West and Central Africa Region, also known as (Abuja MoU) in Lagos.

According to the minister, the essence of PSC is the inspection of ships, to verify their condition, equipment, and whether it is manned and operated in compliance with the requirements of international conventions and regulations.

He said that it was also aimed at ensuring maritime safety and security of lives, assets and the prevention of pollution.

Mr Amaechi, while referring to the port officers as ambassadors of the MoU, said continuous training was required to maintain set standards at Ports.

He, however, called on member states to work together in achieving set goals.

“Bearing in mind that Port State Control Officers are ambassadors of the MoU, it is therefore important that they constantly undergo continuous trainings.

”This will impact on their knowledge and skills as well as on their overall standard of inspections at the Ports. However, this cannot be achieved without the commitment, financial and otherwise of every member state.

“We must all join forces and strive to ensure that we constantly uphold the ideals and objectives upon which the MoU was established.

”For this reason, I urge all member states to play their parts in contributing towards the growth of the Abuja MoU, so that we can constantly meet with expectations and safeguard our marine domains,” he said.

The Minister thanked member states for ensuring that the Abuja MoU performed well in the face of COVID-19 and urged them not to relent in their commitments to inspections, trainings and overall contributions.

“I must thank most of our member states for their performance and swift responses in declaring seafarers as key workers and in lending their support to ensure that the impact of COVID- 19 did not disrupt global shipping.

”While it is to be noted that the resulting effect of the pandemic slowed down inspection of vessels, nonetheless, based on our 2020 Report, the Abuja MoU performed relatively well in the inspection of vessels that called at our Ports,” he said.

On his part, Ghana’s Minister of Transportation and Chairman of Abuja MoU, Mr Kwaku Asiamah, said Port State Control acted as an important safety-net to eliminate the operation of sub-standard ships to ensure the needed safety.

Mr Asiamah said that in spite of the COVID-19 pandemic, ”our performance as flagship states have been very encouraging.”

He called on member states to prioritise the vaccination of seafarers, their off and on signings, especially in the repatriation process and ensure strict adherence to COVID-19 protocols.

He said this would ensure the protection of PSCOs and the Crew of vessels visiting their ports.

Mr Asiamah also charged member states to be guided by the IMO’s Code of Good Practice for PSCOs and other relevant circulars and statutory documents in conducting inspections within the framework of the regional MoU and agreement on PSC.

He urged them to ensure their PSCOs were empowered to safely conduct inspections and to always aim at exceeding the agreed 15 per cent minimum number of foreign vessels that call at the country’s ports.

”States should also accept and endorse the IMO’s guidelines on Cyber Security as part of the Safety Management Codes,” he said.

The Ghanaian minister also called on women to explore careers in PSC and other related fields, saying “women are great agents of change.”

He, therefore, tasked member states to create avenues for the participation of women as Port State Control Officers.

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Kyari to Highlight PIA Benefits at 2021 African Energy Week



2021 African Energy Week

By Adedapo Adesanya

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr Mele Kyari, is set to outline the benefits of the Petroleum Industry Act (PIA) at the 2021 African Energy Week (AEW) set to hold in Cape Town, South Africa.

At AEW 2021, Nigeria’s delegation will be led by Mr Timipre Sylva, Minister of State for Petroleum Resources, while Mr Kyari will lead the discussion on the benefits and opportunities of the PIA.

He will also promote the law, emphasizing how Nigeria will serve as a trend for other resource-rich nations looking to secure international investment.

Nigeria has made significant to reform its oil and gas industry in 2021, with the progressive legislation being passed into law that not only restructures the domestic sector but provides a more attractive investment destination for international players.

With the passing of the act, the country has moved to position and stamp itself as Africa’s top energy market.

The PIA comprises a complete overhaul of the administrative, regulatory and fiscal regime in Nigeria’s energy sector, restructuring key petroleum institutions in order to streamline processes and drive the country’s oil and gas industry expansion.

As the country faces challenges of declining oil production from mature fields, coupled with the reduced capital expenditure climate brought about by the COVID-19 pandemic, the PIA aims to enhance the sector’s attractiveness for foreign investment, ensuring a market-driven regulatory environment that will accelerate the country’s industry developments.

Notable regulatory reforms implemented through the PIA include the creation of a new upstream regulator, the commission, which has replaced the Department of Petroleum Resources; the creation of a new Nigerian midstream and downstream petroleum regulatory authority; and the complete overhaul of the NNPC – to be replaced by the NNPC Limited which will operate on a commercial basis without government funding.

Accordingly, Nigeria has placed transparency at the centre of its reforms. Additionally, fiscal reforms include the reduction in the taxation and royalty-take of new/converted licenses from the prior regime; and the introduction of a hydrocarbon tax – to replace the existing petroleum profits tax.

By incentivising investment, the government is focused on accelerating development across the entire energy sector value chain.

With over 200 trillion cubic feet of natural gas reserves and 36 billion barrels of oil, Nigeria is well-positioned to become a global energy player. Now, with a regulatory environment that places an emphasis on stability and transparency, the country is bound to see an influx in foreign capital and international company participation.

Speaking on the development, Mr NJ Ayuk, Executive Chairman of the African Energy Chamber (AEC) said, “Nigeria has set an incredibly high standard for other African countries. By implementing a complete regulatory, fiscal, and industry overhaul, introducing key institutions and streamlining sectoral regulations, the government has positioned Nigeria as Africa’s most attractive energy sector. the passing of the PIA is exceptional.

“This piece of legislature will usher in a new wave of investment and international participation in the Nigerian sector, and the government should be commended on this achievement. In Cape Town, we are looking forward to Mele Kyari going into detail on the benefits that the passing of the PIA will bring to the country.

“Kyari will advise on the NNPC restructuring, directly engage with investors, and promote the significant opportunities brought about by the PIA.”

AEW 2021, in partnership with South Africa’s Department of Mineral Resources and Energy DMRE, is the AEC’s annual conference, exhibition and networking event. The event unites African energy stakeholders with investors and international partners to drive industry growth and development and promote Africa as the destination for energy investments.

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