The Nigerian Stock Exchange (NSE) has fined NEM Insurance Plc for contravening Rule 19.3 of its Rulebook. This was after the NSE received a complaint by Bernateva Partners – the solicitor to Eaton Acquisitions Limited, a major shareholder in NEM Insurance Plc – to reverse the decisions reached at the Annual General Meeting (AGM) held at Ibadan, Oyo State in June 2018.
Following the AGM the NSE also received complaints from other including:
· Premium Green Limited
· Starvest Limited
· Three Sea Investment Limited
· Oluwaseyilola A. Ojo
The shareholders claimed that NEM Insurance had failed to notify them of the AGM in accordance with section 217 (1) of the Companies and Allied Matters Act (CAMA), SEC clause 24 and NSE rule 19.3, which prescribed at least 21 days’ notice to shareholders of an AGM to be held
They also asked the Nigerian bourse to reverse the special resolution proposed and passed at the AGM to raise additional capital through a private placement at a price below the market price of NEM Insurance stock.
The NSE investigated their claims and found out that:
· The Company did not dispatch the Notice of the 48th AGM and Annual Reports to the shareholders at least 21 days before the date of the meeting.
· The shareholders who did not receive the Notice of AGM were not given the opportunity to attend and exercise their voting rights in respect of any of the resolutions passed at the 48th AGM, including the proposed special resolution to raise additional capital through special/private placement.
The exchange, after its findings, slammed a fine of N575,505.00 on NEM Insurance; being 50% of its listing fee. The fine, according to NSE must be paid on or before November 7, 2018 and failure to do so contravenes Clause 14(d), Appendix III: Form of General Undertaking (Equities), Rulebook of The Exchange, which stipulates a further fine of N300,000.00 in addition to N25,000.00 per day for the period of the violation.
Consequently, the bourse will communicate its findings to the Steering Board of the Corporate Governance Rating System (CGRS), which may decide to suspend, withdraw or do nothing to the CGRS rating of NEM Insurance.
NEM Insurance stock closed at N2.96 during trading session today at NSE.