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Chuks Udo Okonta
Shareholders of insurance companies have said they want their firms to undergo performance driven recapitalisation which provides unique avenue for easy assessment funds management and deployments.
The National Coordinator, Independent Shareholders Association of Nigeria (ISAN) Igbrude Moses, disclosed this today during a visit by Insurance and Pension Editors of Nigeria (IPEN) to ISAN’s Secretariat
in Lagos,
Igbrude noted that insurance industry recapitalisation should be done in phases, stressing that companies should be given a time frame to raise their capital based on the level of risks they carry.
He submitted that firms should not be asked to raise fresh capital without knowing what they have done with the capital at their deposal, stressing that when firms have huge capital without knowing what to do with it, the funds would be misappropriated.
He stated that there is need for the National Insurance Commission (NAICOM) to ascertain how firms utilise funds already at their disposal before thinking of further injection.
According to him,recapitalisation done in the past only led to bogus shareholding in the firms, which later amounted to share reconstructions, thereby leaving shareholders at the receiving end as they lose their stakes in the process.
ISAN Coordinator, also described foreign incursion into insurance sector as pathetic, stressing that most foreigners only take advantage of the nation’s bad economy, undervalued stocks and the poor exchange rate to acquire insurance companies.
“Our economy is so bad that most of our stocks are undervalued, our exchange rate is so poor, a million dollar will translate to N700 million, then if you have N700 million, in this industry, you can buy and have a stake in insurance companies,” he said.
He opied that not all Direct Foreign Investment (DFI) is good for the Nigerian economy, even as he noted that some of the portfolio investors come to take advantage of the weak laws and economy. ” What they do is buy into firms and delist them from Nigeria Exchange and they become private business and then hid them from the eyes of the government and the next thing, you wouldn’t hear about the companies again”, he said.
Acknowledging the fact that there are still good investors, he appealed to the insurance industry regulatory body, to allow only genuine investors into the industry, even as he urged the commission to put in place process to check activities of the fake ones.
The National Secretary of ISAN, Chibuzor Eke, called on NAICOM to provide enabling environment for insurance business to thrive.
He equally challenged insurance firms to wake up and focuse on their core business in order to attract investment. He noted that insurance business is quite challenging given the fact that operators were bent on playing with funds instead of focusing on their core business.
He regretted that in other jurisdictions insurance firms own banks, but in Nigeria he said reverse is the case.
Speaking further Eke, who opined that shareholders were not gaining anything from speculative investment, noted that they are aware of firms that are doing well and those that are not.
Operators, he said should stop enriching themselves instead consider the interest of shareholders who made investment in their firms.
In his presentation, the President of IPEN, Chuks Udo Okonta, said the purpose of IPEN visit to ISAN was to seek cordial media relationship with the association as well as allowed the shareholders to assess their investment in insurance industry.
He promised that IPEN, as a body of insurance and pension editors is ready to reshape the two sectors through developmental journalism.
