By Chinyere Aruogu
Some shareholders on the Nigerian Stock Exchange (NSE) on Friday, May 5 flayed the Securities and Exchange Commission (SEC) over the dissolution of the board of Ikeja Hotels Plc. They told reporters that the dissolution by the apex capital market regulator was belated, a decision SEC ought to have taken long ago.
The Commission on Thursday, May 4, said that the dissolution was a proactive measure that became necessary to dissuade the warring parties from taking certain actions that would give them advantage. In dissolving the board SEC appointed Anthony Idigbe, a Senior Advocate of Nigeria (SAN) as Interim Chairman.
SEC said the board among others is mandated to oversee the conduct of a forensic investigation into the affairs of the company.
The Ikeja Hotels Plc, also owners of Lagos Sheraton Hotel, had been involved in boardroom crisis. The development led to the removal of its Chairman, Goodie Ibru, in 2015 at an Extra-ordinary General Meeting.
However, Chairman, Nigeria Professional Shareholders Association, Godwin Anono, said that the dissolution of the board by SEC was late in coming, and that the infighting among the board members had been there for too long.
Anono said that the shareholders had expected SEC to dissolve the board a long time ago to safeguard shareholders’ interests.
He said that the decision was not too bad, but should have been done earlier before now. Anono advised SEC to ensure that the interim management appointed for the company would not stay more than necessary. He said that from experience, many interim boards instituted by regulators liked extending their stay to the detriment of the minority shareholders.
Anono also advised SEC to investigate the company’s board members and prosecute those found wanting on issues relating to fraud and abuse of corporate governance. He said that lack of prosecution of erring listed companies made retail investors to shun the equities market.
According to him, market regulators should check excesses of companies through prosecution to stop corruption and instill confidence in the market.
Also, Bayo Adeleke, a former Secretary, Independent Shareholders Association of Nigeria (ISAN), also said that SEC should have acted a long time ago. Adeleke said that the infighting had been on in the last three to four years, adding that the commission should have wielded the big stick before now.
“What SEC has done is good, but the decision was late considering the number of years of the infighting,” he said.
Adeleke said that the interim management should be just an intervention to stabilise the company, but should not be a permanent arrangement. He said that the interim management should be given a timeframe to complete its mandate, adding that the company should be handed over to shareholders on completion of its assignment.
Regardless, Sunny Nwosu, ISAN National Coordinator Emeritus, however, commended SEC for its intervention.
Nwosu said that SEC might have delayed to take actions with strong reasons since many individuals had intervened in the interest of the company. “I think SEC was patient to see if they would settle their differences and should not to be accused of acting in haste’.
Nwosu said that the infighting had exposed the greed of some individuals, adding that companies should not only be majority shareholders, but for everyone. SEC on May 4 announced the dissolution of the Board of Ikeja Hotels Plc due to unresolved internal crisis involving some majority shareholders of the hotel.