Shareholders Beg SEC, NSE to Soften Penalties on Quoted Firms

By Dipo Olowookere

In order to attract new listings on the Nigerian Stock Exchange (NSE), efforts must be made by the capital market regulators in the country to review the penalties impose on quoted companies on the nation’s stock exchange.

This was the submission of capital market shareholders on Saturday at an Investors Clinic Programme organised by the Securities and Exchange Commission (SEC) in Lagos to mark IOSCO World Investor Week 2017.

News Agency of Nigeria (NAN) reports that the shareholders complained at the event that incessant penalties on companies were discouraging companies from seeking quotation on the nation’s bourse, thereby affecting the growth and development of the market.

In his comments, Mr Sunny Nwosu, the National Coordinator Emeritus, Independent Shareholders Association of Nigeria (ISAN), said that there was need for friendly policies and regulation by the capital market regulators.

Mr Nwosu said lack of proper compensation to investors that lost their funds during the market meltdown contributed to poor investor confidence in the market, whereas brokers were given forbearance package.

He also frowned at the commission’s move to invest the unclaimed dividend funds into special funds, saying that shareholders were not in support of the initiative.

Mr Nwosu said that the proposed issuance of electronic annual report should not be made mandatory, but optional.

He said the law stipulated that annual reports must be posted to shareholders 21 days before the annual general meeting.

Also, Mr Boniface Okezie, the President, Progressive Shareholders Association of Nigeria, who commended SEC for organising the clinic, said that market regulators must pursue friendly policies and initiatives to put the market forward.

Mr Okezie said that investment of unclaimed dividend funds into special funds must be dropped in the interest of the market.

He, however, lauded the commission for bringing the shareholders together to chart the way forward for market growth and development.

“If we have this type of relationship in the past, the Central Bank of Nigeria would not have nationalised the banks listed on the exchange,” Mr Okezie said.

He said that the banks nationalisation affected investors’ confidence in the market.

“It is not only SEC that is affecting for protection, shareholders are also fighting for protection”, Mr Okezie said.

He said that the new leadership of the commission had done well with the introduction of various initiatives and zero tolerance on fraudulent capital market operators.

In his comments, Mr Moses Igbrude, the ISAN Secretary said that the issue of penalties must be readdressed by market operators for confidence building.

Mr Igbrude said that some companies had delisted from the exchange due to penalties while new companies were afraid to list.

He said that SEC and NSE should encourage the companies to embrace share buyback initiative instead of approval share reconstruction for companies used in rubbing investors.

In his reaction, Chief Timothy Adeshiyan, the President, Nigeria Shareholders Solidarity Association (NSSA), said that market regulators should be fair in their regulations and penalties.

Mr Adeshiyan said that penalties were paid from the shareholders funds’ and was also discouraging investor confidence.

Earlier, Mr Mounir Gwarzo, the SEC Director-General, said that the World Investor Week (WIW) was a week set aside for educating investors on their rights.

Mr Gwarzo, represented by Mr Eddy Rowlands, the Executive Director, Market Development, said that the commission would continue to embrace initiatives that would move the market forward.

He said that the clinic would make investors to be better equipped at the end of the programme.

Mr Gwarzo said that the initiative would enlighten investors and shareholders on what regulators and market operators were doing to uplift the market.

He said that the commission had established financial inclusion programmes to increase market participation and as well boost Collective Investment Scheme among market women and men.

Mr Deji Balogun, the Chief Executive Officer, AFEX Commodities Exchange, commended the commission for taking the capital market to the younger generation.

Mr Balogun also tasked market operators on the need for introduction of new products that would appeal to the younger generation.

He said that opening of stockbroking accounts for new investors should be done through smart phones in line with present realities.

Also, Dr David Ogogo of the Institute of Capital Market Registrars, said that the issue of the unclaimed dividends would soon be an issue of the past.

Mr Ogogo said that registrars would continue to work with market regulators and operators to ensure effective implementation of the 10-year capital market Masterplan.