‘Company CEOs, directors should declare assets’

Akin Adewakun, Lagos

Chief Aderemi OyepejuChief Aderemi Oyepeju is the Chairman of the Ibadan Zone Shareholders’Association, a group representing the interest of shareholders in the South Western Nigeria. In this interview with Adetunji Adeleye and Sulaimon Adesina, he bares his mind on the relevance of shareholders in company decision making, among other industry issues. Excerpts:

What are your plans towards the improvement of welfare of shareholders in the country? It is my responsibility to educate Nigerian shareholders through workshops and seminars on their responsibilities as investors in public corporations, so as to demand for their rights of dividends, bonuses and rights of governance in industries, especially the banking sector.

Secondly, it is my responsibility to champion the cause of shareholders to be directors in organisations and also as members of the audit committees of various companies. Through these steps, the shareholders will have access to internal control sysptem and effective runnings of these companies. Finally, my administration will work towards giving equal rights to minority and majority shareholders in enjoying the privileges that should accrue to them.

Nigerian companies, especially the banks are often coming to the market to raise funds, but the investors are becoming concerned as to the real effects of the funds raised. What is your view on this? Sincerely, all shareholders are eager for the banks to give the return of the N25 billion recapitalisation exercise before their second coming. In actual fact, the Bankers’ C ommittee had questioned the ability of the Nigerian banks to give real returns on the N25 billion capital base mandated by the Central Bank of Nigeria (CBN). The performance of the economy has since proved the committee right on their observation. We, shareholders have been questioning the coming to the market of the banks this time again to raise funds, but they are promising that the average investor will reap the benefits of investment this time. They have promised to abide by their promise and we are monitoring their performance, reminding them of the promise from time to time.

Societe Generale Bank is promising to meet the recapitalisation or merger deadline given her by the CBN. Are the Nigerian shareholders hopeful of the ability of the bank to bounce back? Societe Generale, as bank, considering its assets and pedigree, has all it takes to meet the N25 billion recapitalisation target base. What the investors are more concerned with is the politics that resulted in its collapse in the first place. We want to be sure that the fate of the investors is not threatened by the powerplay. That is the crux of the issue. The same powerplay, it was, that consumed Savannah Bank, and many investors are becoming uneasy with goings-on in another major bank in the sector now. So, the issue of Societe Generale is much more a complex issue that encompasses many things. Overall, however, we will always be on the watchout to safeguard the interest of the average shareholder.

The average Nigerian shareholder is being accused of being found wanting on the issue of ethics. His performance as member of the audit committee has barely made significant impact, and most disheartening, he is accused of collaborating with directors, to jeopardise the interest of fellow shareholders. Where lies the future? The shareholders bodies are not happy with such news and that is why enlightenment will take a prime place in our plan. There is no doubt that the shareholders need to be educated on the issue of corporate governance. It is their responsibility to have input in the decision-making process and profitability of the organisation.

The major problem which shareholders who are members of the audit committee have to contend with is the tendency of management of companies to wield their influence. They (the management) are not ready to give the shareholder room to perform, wherever such opportunities present themselves.

I am therefore convinced that the tenure of the members of the audit committee should be extended from its present one year to four years of two terms, to allow for continuity. For instance, if a particular shareholder has plans that can move the organisation forward, and is implementing such plans, through the audit committee, he will become an enemy of the management. If the audit committee has the opportunity to stay for more than a year, such member will be able to actualise his plans, but the management can easily influence the committee if members do not stay for more than 12 months. The management of organisations are not favourably disposed to allowing a responsible audit committee member to perform.

But the shareholders associations in the country are moving together to fight the cause of the investors. We are, indeed, sad that there had not been much activism on the part of the shareholders before now. On this, the younger generations are being encouraged to come out and learn to take over from the ageing ones. We are planning to hold a conference of all shareholders in the South West, including Kogi State, on how to work together.

Apart from conveying of meetings, what other efforts is your association making to harmonise the workings of all shareholders in the country? There is no doubt that more values will be added to the voice of shareholders if we speak together as one. We commend the efforts of the Securities and Exchange Commission (SEC) for all its positive efforts which have lifted the positions and status of the Nigerian shareholders to enviable position. The shareholders bodies are behind the SEC as it is moving companies forward in the country.

The problem of ethics, as in the case of Cadbury Plc, has generated more questions on the moral values of management of organisations in the country. What is the position of your association on this? It is my belief that all directors on board of the company as at the time of the incident are liable. The SEC should not spare anybody, even up to the audit committee. It should beam its searchlight on all chief executive officers and managing directors of all organisations in the country and wield out the incompetent ones.

In fact, all the managing directors, chief executive officers, executive directors of companies should be made to make a declaration of their assets from the first day of their appointments. If the senators, House of Representative members and other political office holders could make such declarations, it is incumbent on the corporate leaders to do so. This will bring sanity in the performance of organisations.

This fact is more important because the management team are trustees of the investment of the general public, they are not the owners. An average managing director, or any other in the managerial position of organisations in the country sees his post as one meant to attract affluence, wealth and spend money without justification.

Do you think that the shareholders deserve to be given more rights under the company law to be able to make better contributions towards the growth of organisations in the country? Yes, and I want to say that there should be some ammendment to the provisions of the Companies and Allied Matters Act 1990 as to the memebership of shareholders in the audit committee of companies.The management of organisations will be better challenged if the shareholders are allowed an increased period as members of the audit committee. The CBN has been too silent on the issue of the audit comittes. It is our belief that the regulatory authorities will do something on this issue because it is a viable way of preventing unwholesome activities in most of the companies.

What will you say is accountable for the poor performance of banks in the country despite the recapitalisation and their expanded operation base? The major problem lies with the policies of the government at the centre.It behoves on the Federal Government to come out with programmes that will impact more on the micro sector.

Although there have not been much impact of the banks’ expansion and improved capital base on the performance of the nation’s economy in the real sense of the issues, the policies of the Federal Goverment need review. For instance, most of the recently licensed micro-finance banks do not have outlets in the rural places where, indeed, the targeted market can be found.

There is also the power generation problem for organisations to contend with. All these issues combined are barriers to efficient performance of businesses in the country and not only the banking sector.

How do you respond to the issue of unclaimed dividends in our various companies? It is the problem of the company registrars who do not usually post the warrants on time.

Lagos moves to check banks’ locations

Dachi Maduako, Lagos

The new craze for location of branches of banks in any available property especially along major roads in the Lagos metropolis has received a knock from the Lagos State Government as the Physical Planning and Urban Development Commissioner, Mr. Francisco Bolaji Abosede, has put on hold any further developments.

Rising from a meeting with officials of banks operating in the state, the commissioner gave them two weeks ultimatum to submit to his office the lists of their Headquarters and branches in Lagos State.

The banks are to indicate in their lists whether those headquarters and branches have approved plan. The instruction states that henceforth, there should be no construction of new branches, without prior approval by government.

He observed that banks had resorted to indiscriminate location of bank buildings without regard to existing physical planning regulations in line with Lagos Mega City project, of the state government. He pointed out that the impact of this proliferation on traffic is more pronounced, because the bank branches lack parking spaces thereby making customers pack their vehicles on the street and on major roads, causing traffic problems.

The commissioner called on the bank representatives to cooperate with the state government to ease traffic in the state. He suggested to the representatives to have a common parking lot. The representatives in response have set up a technical working committee to address the issues discussed.

In another development, the commissioner reiterated the need to checkmate incalcitrant developers, whom he accused of being responsible for collapsed buildings in the state. He bemoaned the situation where structures are erected on land without approval from the government.

According to him, erecting structures without government approval, sub dividing any land or partitioning any land for the purpose of obtaining a separate certificate of occupancy, or increasing the height or the density of a building, not stipulated in original approvals do not make for proper physical planning of any state.