Dissenting NGX Shareholders fault resolutions at company’s 61st AGM

A class of shareholders of the NGX Group has frowned at its recently held 61st Annual General Meeting (AGM) and notified the company of its grievances through its lawyers, Messrs S. O. C. Legal represented by its Senior Partner, Oluwaseyilayo Ojo, who has commenced the pre-action protocol to set aside all resolutions at the AGM deemed illegal.

The aggrieved persons are Messrs Olayinka OIajuwon and BamideIe Ibironke, a representative of  a class of shareholders of NGX Exchange Group Plc. Their concern was brought to the attention of the Chairman of the NGX Board and its  Managing Director, Chief Abimbola Ogunbanjo and Mr. Oscar Onyeama respectively.

The worrying NGX shareholders have stated that the notice of the AGM issued by the company’s  Company Secretary/Head of Compliance, Mojisola Adeola was ill-advised, fraudulent and fraught with illegalities and amounts to egregious abuse  of  privilege  by the      Board of Directors. They argued that the  Notice is contrary to the Companies and Allied Matters Act (CAMA), Investment and Securities Act and other relevant capital market statutes and regulations. They also insisted that the notice and resolutions are contrary to the Board Charter of the company.  According to the protesting NGX shareholders, the  notice of the 61st AGM should not have been issued in the first place as it  offends  extant laws   and  codes   of  corporate governance and violates shareholder  rights.

Messrs Olajuwon and Ibironke argued that the NGX Exchange Group PIc sits at the top of the capital market, and must be held to a higher standard of compliance with law and regulations. It remains a company incorporated under the laws  of  the Federal Republic of Nigeria. It is definitely not above the law and must be seen to comply with  the  law.

Some of the resolutions which the NGX 61st AGM sought to achieve, which are being contested by the aggrieved shareholders include, but are not limited to:

(i)            To   re-elect   transitional    non-Executive Board    members of  the Company to roles that have already lapsed under the terms of  a  Scheme of Arrangement that re-birthed the Company as a  Public Limited Company (PLC).

(ii)           To           raise additional capital   for th e Company to the tune of N35, 000,000,000 (Thirty- Five Billion Naira) through a hybrid offering of equity and debt. Specifically, equity of N20 billion and debt of N15 bullion.

( III )To effectively vest upon the Board of Directors far reaching discretional powers  and  to raise capital in any manner they determine, including  by  way   of   a  rights issue, public offering or private placement;

(iv) To  cancel existing but unissued shares  of  the Company and effect an amendment of the Company’s memorandum and articles to refer only to the issued shares.

The Notice further provides that attendance at the  meeting  shalI  be  by proxy onIy. The reason for this is said to be the  COVID-19 guidelines issued by the Federal Government, Lagos State  Government  and the Corporate Affairs Commission  (CAC).  Accordingly,  members  are  told  to choose proxies out of  eight persons selected  by  the  Board of  Directors as the onIy eligible proxies from and through whom members must choose, attend and vote.

The dissenting NGX shareholders hold the view that by definition ‘capital’ of a company refers to the total assets  of  a business or  total  amount  or  value of  its stock,  which  in turn is partly a  function  of  a  company’s  asset  worth.  It  is  unthinkable how incurring a debt burden of  at N15  billion for  the company  will  translate to raising capital for the company  that  remains  a  viable, highly regarded entity  in  the  capital market  with  unissued  shares  from which to raise capital.

They further argued that Section 340 of SEC regulations provides among others, that a public company seeking to offer securites by private placement must show evidence of dire need of fresh funds and shall satisfy the commission that the private placement remains the only viable alternative. No evidence has yet been put forward to show compliance with this provision.

According to them, “It is now public knowledge that Directors of the company recently paid themselves whopping sums of money under the guise of allowances and other pecks of the office.”