By Modupe Gbadeyanka
All seems not to be too well between Nigerian Breweries and its shareholders if a report by Vanguard is anything to take serious.
The journal reports that shareholders of the brewery firm not in agreement with the Board of Directors over the plan to convert the N21 billion cash dividend earlier proposed by the directors to ordinary shares.
According to those spoken to by Vanguard, the shareholders have resolved to vote against the motion when it comes up for approval at the Annual General Meeting (AGM) today.
At the moment, the matter has been reported to the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) for their prompt interventions.
Vanguard investigations show that the directors would still push the proposal successfully given their majority stake in the event the face off leads to a poll. It is not yet clear if the regulatory authorities are stepping in to douse the tension.
The NB’s Board of Directors had proposed N20.5 billion as final dividend, amounting to cash dividend of N2.58 per share, for the year ended December 2016.
But the company later said it will seek shareholders’ approval at the AGM tomorrow to convert the cash dividend to scrip issue.
According to the company, the conversion will help it to consolidate on its balance sheet.
But speaking exclusively to Vanguard, the shareholders insisted that dividend payment is their right and must be paid once it is declared.
Sir Sunny Nwosu, former National Coordinator, Independent Shareholders Association of Nigeria (ISAN) opined that the move is a ploy by the directors to increase their stake in the company as a first step towards eventual exit from the NSE.
“We are totally against it because it is taking undue advantage of Nigerians. We are all aware that we are in recession and everybody needs every kobo; the directors do not need the dividend and, therefore, they want to use the scrip issue to increase their holding in the company.
“Whether it is one percent or 001 percent that the scrip issue will add to us as shareholders, it is not desirable to us.
“What they are saying is that they could not transfer their dividend. But they have been transferring their dividend for 70 years, so, why don’t they bear with us at this time of difficulty.
“It would have been better if they had not declared the dividend and allow the interim dividend to remain as the final dividend than declaring dividend and at the same time complaining that they want to plough back the money. It then means that the dividend declared can be classified as fake dividend,” Mr Nwosu said.
Echoing Mr Nwosu’s view, Chairman of Ibadan Zone Shareholders Association, Mr Heric Akinduro, said shareholders should be allowed to make a choice between converting their dividend to ordinary shares and going home with their dividend.
“For those that have excess money, they can increase their holding, but for those that do not have, they should give them cash,” he declared.
Agreeing with others, National Chairman of New Dimension Shareholders Association (NDSA), Mr Patrick Ajudua, argued that, “We are totally against it. Once a company has declared dividend, it should keep to it. We are after our dividend because most of us have reduction in our purchasing power and the cash dividend will enhance our financial position and enable us to meet our obligations. This plan is not the best for us and that is why we are against it.”
Source: Vanguard
