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Shareholders differ over SEC’s plans to monitor shareholders’ associations

By Michael Eboh
DISSENTING views have trailed the effort of the Securities and Exchange Commission (SEC) to regulate shareholders’groups in the country.

Shareholders, who spoke with Vanguard, expressed conflicting views over the action of SEC, with some saying it is a welcome development, while others kicked against it.

SEC had declared, recently, that only seven shareholders’ groups in the country have filed with it their Corporate Affairs Commission (CAC)’s  registration certificates as required by the Investment and Securities Act (ISA).
It noted that the ISA has mandated SEC to register and regulate operators and other stakeholders in the nation’s capital market. The essence of the registration with the CAC is to be able to identify the various leadership of the Associations, their membership and to bring them under regulation.

According to SEC, the seven shareholders’ groups that have filed in their registration with it include: Lagos Zone Shareholders Association, Renaissance Shareholders Association, Association for the Advancement of the Rights of Nigerian Shareholders, Dynamic Shareholders Association of Nigeria, Nigerian Shareholders Solidarity Association, Proactive Shareholder Association of Nigeria, and Pace setter Shareholders Association of Nigeria.

According to Mr. Olufemi Timothy, President, Renaissance Shareholders, who bears the mind of his members said, “ regulating the activities of shareholders’ groups will help reduce the proliferation of illegal associations whose activities and mode of operations are detrimental to the development of the capital market.”

He said, “It is a fact that only seven associations have deemed it fit to inform SEC of evidence of their CAC registration, out of the 19 known to SEC.

“The implication is that as the apex regulatory body, SEC has sent messages to operators and companies on who and who to deal with officially.

“This will help in no small measure to reduce incidences of proliferation of association and identify those with records. It is a welcome development for our activities.”

Speaking in the same vein, Taiwo Oderinde, National Coordinator, Proactive Shareholders Association of Nigeria (PROSAN) said, “The Nigerian capital market will be 64 years old this year and shareholders’ associations or activism started about two decades ago. Shareholders are the main players in the market  because without them there will be no regulators and operators.

“In February 2007, SEC launched the Code of Conduct for Shareholders Associations, to regulate their activities for orderliness in the market.

“Registration with CAC is one of the criteria. With the recent revelation by SEC that there are 19 Shareholders’ Groups in Nigeria with only seven registered with them and CAC, the activities of the other unregistered groups will be affected negatively, because no stakeholder in the market will want to deal with an illegal group. That is, without registration they are illegal groups, like militant groups.

“For example, when PROSAN sued the Central Bank of Nigeria (CBN), they first requested for our evidence of registration before having anything to do with us.

“Registration will separate us from touts and area boys who do come to the venues of our meetings — annual general meetings and extraordinary general meetings, claiming that they are representatives of shareholders’ groups.”

Mr. Boniface Okezie, National Coordinator, Progressive Shareholders Association of Nigeria (PSAN) kicked against plans by SEC to regulate shareholders’ activities, noting that it is not within the powers of SEC to decide how shareholders’ groups should conduct their businesses.

According to him, the laws of Nigeria do not give SEC such powers, as the law allows for freedom of association.He said, “It is not within the powers of SEC to regulate shareholders’ association, because this is outside its powers. The law of the Federal Republic of Nigeria allows for freedom of association, and SEC should not been seen to be going contrary to this law.

“On the issue of registration with the CAC, it is a known fact that there are numerous bureaucratic processes in getting an association registered. May association for example, have filed for registration for more than two years now, and we are yet to be registered.

“This is true for many other frontline shareholders’ groups that are yet to get the registration. However, this does not make us ineffective or incapable of protecting the interests and rights of our members.”


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