Shareholders
ZAKA KHALIQ (NEWSWATCH TIMES NEWSPAPER)
The shareholders of insurance stocks in the country are angry with the management of underwriting firms for their failure to declare dividend in the 2014 financial year, as most of the insurers are yet to declare dividend in the last four years, Newswatch Times can reveal.
Of the 28 listed insurance companies on the exchange, only Cornerstone Insurance, NEM insurance Plc, Custodian and Allied Insurance Plc and one other firm, were able to declare dividend, though the dividend declared by these firms was below one Naira.
The likes of Law Union and Rock Insurance Plc, Linkage Assurance Plc, Wapic Insurance, Universal Insurance Company Plc, Unity Kapital Assurance Plc, UNIC Insurance Plc, Standard Trust Assurance, Equity Assurance Plc, Regency Alliance Insurance Company Plc, Niger Insurance Plc, LASACO Assurance Plc, Great Nigeria Insurance Plc (GNI), Prestige Assurance Plc, Mutual Benefits Assurance Plc, AXA Mansard Insurance, Standard Trust Insurance(STI) Plc, Goldlink Insurance Plc, Standard Alliance Insurance Plc, Royal Exchange Insurance Plc, Consolidated Hallmark Plc, Staco Insurance Plc, among others, could not pay either dividend or bonus to shareholders, as most of them were accused of wasting several millions of Naira on payment of fines to the National Insurance Commission (NAICOM), Financial Reporting Council of Nigeria (FRC) and the Nigerian Stock Exchange (NSE).
Newswatch Times exclusively gathered that the fines paid by insurers to the regulators in the year just gone bye for offenses committed in their 2014 financial year, was above N500 million, as those who had accumulated fines from 2012 to 2014, were asked to settle all at once, thus, affecting their profitability.
The shareholders, who vehemently protested this development at their respective Annual General Meetings (AGMs) last year, lambasted the managers of the insurance firms for using a huge sum of money that could have been used to pay dividend to shareholders, to pay fines on avoidable offenses.
They were unhappy that their investments in these companies are not yielding returns, even as the prices of insurance stocks are now selling below the par value.
Henceforth, the shareholders agreed that the management should be responsible for any monetary fine meted on errant firms, and not be deducted from the purse of their respective companies.
Speaking to Newswatch Times in Lagos on behalf of aggrieved shareholders, the Coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, said allowing companies’ management and board to pay for fine, would help reduce infractions and keep executives on their toes.
He expressed misgivings on how shareholders are allowed to suffer for crimes they know nothing of, stressing that the huge amounts paid as fine would have accrued to shareholders as dividends.
“Penalties do not give any value to top executives, it is shareholders money that is thrown away, and that was why ISAN has spearheaded a situation to say that if any company is penalized, the management and board should be held responsible to reform the money,” he said.
He noted that the idea was muted to checkmate the care free attitude of some management and board, stressing that making the parties responsible for the penalties would make them play with caution and protect shareholders’ investments.
Earlier, NAICOM and shareholders have engaged in war of words over fines and penalties paid by underwriting firms. While the regulator accused shareholders of been used as stooge by firms to cover financial mismanagement, shareholders alleged that the commission is profiting from sanctions and penalties imposed on firms, while denying investors return on their investments.
http://www.mynewswatchtimesng.com/shareholders-slam-insurance-companies-managers-dividend-blackout/
One Comment