REAN shareholders approve transfer of N2bn portfolio to subsidiaries

Ayeleso Oladele, Lagos

Erastus Akingbola, GMD,
Intercontinental BankThe Board of Directors of Royal Exchange Assurance (Nigeria ) Plc, the pioneer risks underwriting company in the country has been empowered to transfer both its life and non-life insurance portfolios to its subsidiary companies majoring in the respective lines of business. The shareholders unanimously voted in favour of a proposal by the board to the effect that the entire life portfolio and the underlying assets together with the assigned assets and liabilities of a net asset value of N2,441,639,000 of Royal Exchange Assurance (Nigeria) Plc be transferred to Royal Prudential Life Assurance Company Plc.

The two receiving subsidiaries are Royal Prudential Life Assurance Company Plc and Royal General Insurance Company Limited respectively. Approval to this effect was handed the board at the Court-Ordered-Meeting hosted by the three companies in Lagos recently. The owners of the company also advised the board to uphold corporate governance rules in its business dealings . At the meeting, the shareholders unanimously approved a proposal to the effect that "subject to regulatory approval, the company be and is hereby authorised to transfer the Life and Non-Life businesses of Royal Exchange

Assurance (Nigeria) Plc to Royal Prudential Life Assurance Company Plc and Royal General Insurance Company Limited respectively through a Scheme of Arrangement (the Scheme) under Section 539 of the Companies and Allied Matters Act, 2004 ("CAMA")". The shareholders also empowered the board to transfer all the life assets and liabilities of the group to its subsidiary transacting life insurance business while the non-life portfolio should in the same manner be transferred to the non-life subsidiary.

NASB recommends antidote to false accounting

Sulaimon Olanrewaju, Lagos

The Nigerian Accounting Stan dards Board (NASB) has recommended independence of external auditors, internal audit function and adoption of principle-based rather than rule-based standard setting as antidotes to false accounting by corporate bodies. Delivering a lecture during a Linkage/Awareness programme organised by the Board for universities in the country, the Executive Secretary of the NASB, Mr. Godson Nnadi, charged the Securities and Exchange Commission to come up with rules that would ensure the independence of the external auditors.

Such rules, according to Nnadi, would include breaking up audit and consulting divisions of accounting firms, prohibiting the external auditor from also serving as the internal auditor of the same firm, encouraging accounting firms to organise peer reviews among themselves to check the quality of their audit work, and prohibition of an accounting firm from deriving substantial proportion of its revenue from one audit client. Stressing the importance of true and reliable financial reports, Nnadi said they were the tools potential investors and the general public use to assess the performance of a company over a period of time and the means of comparing firms in the same industry.

He, however, said comparison and business decision on which firm to invest in would be very difficult without accounting standards, saying that accounting standards are essential because they lead to the efficient allocation of resources in the economy such that more successful companies are better able to raise capital to finance their operations than the less successful ones. Contributing to the Linkage programme held at the Premier Hotel, Ibadan, Professor Grace Chibiko Offorma, of the Department Of Arts Education, University Of Nigeria, Nsukka advocated overhaul of the curriculum of our educational institutions to include entrepreneurial skills, study of Information Communication and Technology (ICT) and value reorientation to inculcate in the learner the right attitudes, values and social norms.

“In Nigeria the school curriculum is still heavily burdened with a lot of setbacks ranging from policy formulation to curriculum implementation. The issue is not formulating policies but empowering the implementers to successfully execute the policies”, she said.The Technical Director of the NASB, Mr, Jim Obazee, in his own contribution advocated the internalisation of ethics in business. “In the increasingly conscience-focused marketplaces of the 21st century, the demand for more ethical business processes and action is increasing”, he said

The linkage programme is part of a series of measures being adopted by the NASB to improve corporate governance in the business environment through impacting the training programme of accountants and auditors in the tertiary institutions. Apart from the lectures, the NASB which is the body saddled with the task of setting and enforcing compliance with accounting standards in the country is also donating books and other facilities to the universities to bring them up to date on accounting standards issues.