The Pragmatic Shareholders Association of Nigeria on Friday kicked against the move by Securities and Exchange Commission (SEC) to ban sharing of gifts at Annual General Meetings (AGMs).
Mrs Bisi Bakare, National Coordinator, Pragmatic Shareholders Association of Nigeria, told the News Agency of Nigeria in Lagos that the new rules being proposed by SEC would not work.
NAN reports that SEC is planning to create a sub rule to regulate the conduct of AGMs.
The new sub-rule specifically seeks to reduce the cost of organising shareholders’ meetings by making illegal the distribution of gifts to shareholders, observers and any other persons at annual and extraordinary general meetings.
Bakare said the association was totally against the commission’s proposal to ban sharing of gifts and holding pre-AGMs, stressing that the development should be managed rather than an outright ban.
According to her, the proposal showed that the commission had lost focus in the capital market.
The national coordinator, who acknowledged there were abuses by some shareholders, said the commission should not “throw away a baby with bath water’’.
Bakare said that such abuses should be checked or managed rather than depriving privileges to the shareholders.
She said that gifts distributed to shareholders at AGMs were minute when compared with Corporate Social Responsibilities and donations recorded by companies on a yearly basis.
“The gifts at AGM are a smile to an annual birthday which you mark in appreciation of another successful business year,” Bakare said.
According to her, AGMs, apart from being statutory requirements to approve the accounts, is a celebration time between the company and its shareholders.
Bakare said that shareholders, being represented by proxies and those with small holding units, were the ones causing rowdiness during sharing of gifts at AGMs.
“Shareholders who cause problems and nuisance at AGMs are those who have 10 units, 20 units, 30 units, 40 units, 50 units even 100 units of shares,” she stated.
The shareholder activist said the Nigerian Stock Exchange needs to look into the issue by introducing minimum buying units from the secondary market to eradicate the problem.
“When we are applying for public offer, there are minimum units required. Why not same in the issue of secondary market,” she asked.
On the issue of pre-AGM, Bakare said that shareholders should not be denied their rights.
She said that pre-AGM affords shareholders enough opportunities to interface with the managers of their companies.
According to her, there are questions that cannot be asked at the floor of AGM for the sake of the company’s image but can be asked at pre-AGMs.
NAN reports that SEC proposed a N10 million fine against any company which will flout the rule.