BY WILLIAM JIMOH & HANNAH ISIBOR
I want to talk about the takeover of GSK (GlaxoSmithkline), which foreign investors are trying to corner by taking up to about 80 per cent of the shares issued capital, thereby taking over the company.
They made that proposal at a meeting last week and the minority shareholders said no. We do not want that because already they are controlling about 45 per cent, and they are talking about increasing it to 80 per cent. From that 80 percent who knows whether the next thing we would hear is that they are taking it to 90 or 95 per cent and then, they would push the minority share holders out of the operation.
Just like other companies have been doing, we know of companies like the Nigerian Bottling Company, and many other companies that I may not be able to mention off-hand now. This is how they started, at the end of the day, they push out their minority shareholders and began to run the company on their own because they have generated so many funds.
But when they came to the market and needed to raise funds, they were pleading with shareholders to buy their shares.Having collected our money and made a lot of profit from it, they want to push us out and they have always done this by delisting their stocks from the exchange. Some other time, all they do is to pay us off and that is the end.
The regulatory authorities are aware, the Nigeria Stock Exchange (NSE), Corporate Affairs Commission, Securities and Exchange Commission, SEC, all these people are aware because before they even thought of taking such a step, they would surely inform all these bodies. Though, they usually prepare what is called scheme of arrangement which shareholders have to approve, but what we have today is that before the shareholders approval, they will go to these regulatory authorities, talk to them privately, give them what they will give them in order to go on with the scheme of arrangement. With such an arrangement, the regulators are not performing their functions enough.
If they had followed the former pattern, the Nigerian Indigenisation promotion decree, all these will not be happening. This decree did not allow coming in and going out as the way we are having it today.
That is why it is good that all these foreign companies be owned by Nigerians or managed by Nigerians and at worst, Nigerians should be part-owners of the companies. But now because the CAMA has come in, most of those things have been removed. They now have opportunity to come in and go out with out any challenge from anybody, not even the regulators.
It is affecting us and also has real effect on the market. What we are experiencing is the direct opposite of our expectations because, if a company at the start was paying 50k or N1 dividend per share, if such a company begin to make more profit, that is when the shareholders should be gaining more and that is when there ought to be increase in their dividend.
But instead of going into that, they decide to push us away in order to make more money on their own. The arrangement we are having currently is not actually protecting the interest of the minority shareholders. If you talk about voting, they have the highest number of shares, therefore, they will surely win.
The only way out of this is to amend that part of the CAMA that whether they have the highest share volume or not, that should not be the criteria for dumping minority shareholders. But until then, we will continue to face this challenge.
(Chief Robert Igwe is the Former General Secretary of the Nigerian Shareholders Solidarity Association)
I lost everything but I will still invest — Abu Edward
I bought shares before the meltdown in the capital market.Then, the meltdown came and so many people including myself lost interest to the extent that I don’t even want to involve myself with the happenings in the market.
I put all that I had into investment of stocks and recorded a lot of losses. Since then, I lost interest in capital market. I absolutely lost the kind of interest that I had in the investment when I started, but I know the shares are currently appreciating but I have sold all my shares and if I have enough money I will go back into the capital market to invests.
Regarding my understanding before I entered the market, I saw the market as an industry for investment; I saw it as a place where you can invest your money not for immediate profit but for the future.
Honestly, I do not know much about this market. I invested because some of my friends invested. I saw it as any other business where you can lose as well as make profit, just as you can invest in the oil or shipping business and lose. It is purely an element of uncertainty.
I have no time to attend any of their Annual General Meetings. I attend only any time I am chanced but I look at the trend of things in the newspapers. I still read to see the movement of how the market is going, and my conclusion is that whenever I have money, I will go back to the market.
I pray the market continues to appreciate — Emmanuel
Every body knows what is happening in the stock market. I am not even interested in stock market again since it flopped; I lost interest although I have my shares there. It is my prayer that the market continues to appreciate.
The companies usually send me AGM notifications, but I don’t have time to attend most of them because the location is usually far from my place.
Sometimes, they take the meeting to Abuja while some are held in Calabar. I have never attended any one because of the distance. I still have confidence because my money is there; I pray my money should come up so that I will be able to get something close to what I invested. I always go to my stock brokers to know how far the stock is doing, and also check the newspapers.