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SEC urges shareholders associations to merge for effectiveness




The Securities and Exchange Commission (SEC) on Thursday called for mergers among the 125 shareholders associations operating in the Nigerian capital market to form stronger alliances.

Ms Mary Uduk, SEC’s Acting Director-General, made the call at the Issuers and Investors Alternative Dispute Resolution Initiative (IIADRI) annual symposium on Thursday in Lagos, saying that mergers would make them stronger and more effective.

The News Agency of Nigeria reports that the theme of this first annual symposium was : “AGM Optimisation: The Roles of the Company Secretaries, Regulators, Registrars, Auditors, Media, Shareholder Associations and other Stakeholders’’.

Represented by Mrs Maryam Sallau, Uduk said that mergers would make shareholders’ associations stronger, more influential, effective and also enhance shareholders’ value.

According to her, the merger will produce stronger and better associations as well as help in market growth and development.

Uduk noted that there were 125 shareholders’ associations presently recognised by the commission, noting that more applications for recognition were being processed.

The acting director-general said that the Securities and Exchange Board of India (SEBI) had only 24 recognised investors associations.

“The number of shareholders’ associations recognised by the commission is growing and may soon outnumber the listed companies on the Nigerian bourse.

“In order to make shareholders’ associations stronger, more influential, and effective and indeed enhance shareholder value, it is advised that some of the associations should form stronger alliances by way of mergers,” Uduk said.

On the benefits of stronger and coordinated shareholders’ associations, she said: “It would foster the protection of investors’ interest through the enhanced scrutiny of the activities of companies by members of the associations.

“Through the associations, shareholders will also be provided with platforms to network and exchange of ideas as the associations enlighten members through their meetings and capacity development programmes.’’

She added that strong and coordinated associations provide invaluable benefits to shareholders by bringing good representations of shareholders at Annual General Meetings (AGMs) or Extraordinary General Meetings.

Uduk spoke on the theme: Enhancing shareholders value through stronger and coordinated shareholder associations: Why and how?.

The lead speaker, Ms Daisy Ekineh, Chief Executive Officer, DSE Advisory Services Ltd., said that shareholder associations as currently exist were neither effective nor respected.

Ekineh said that shareholder associations in Nigeria were not taken seriously by stakeholders including public companies.

She noted that they were perceived as often seeking pecuniary benefits from companies as against ensuring good governance and were also perceived as disruptive rather than disciplined at AGMs.

“There are too many shareholders associations, making it difficult for regulators and others to effectively engage with them,” she said.

According to Ekineh, there are over 100 registered shareholders with the CAC, according to SEC’s records in 2017.

She said that SEC had to issue the Code of Conduct for Shareholders Associations to mitigate the negative activities of the associations.

“Shareholder associations can only ensure required governance on companies, if they themselves act responsibly and with integrity.

“Shareholder activism in Nigeria should not be synonymous with confrontation and intimidation but effective engagement,” Ekineh.

She urged shareholders to know and understand their companies in order to be efficient.

“Effective shareholder activism complements regulators in investor protection, promotes good corporate governance and could enhance shareholder value,’’ she added.

Earlier, Mr Moses Igbrude, IIADRI Chairman, said that the organisation was borne out of a passion to entrench harmony and engender growth in the Nigerian Stock market through investors and issuers enlightenment on alternative dispute resolution mechanisms.

Igbrude said the association is particular about using mediation, conciliation and negotiation as veritable tools in achieving its set goals and objectives.