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NSE to Support Investors’ Right to Dividends

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Nigerian Stock Exchange (NSE) has stated that it shall not hesitate to administer and enforce a 5% sanction on any Issuer that fails to pay dividends to its shareholders within the timeline specified in the resolution passed by the shareholders at the Annual General Meeting at which such dividends were declared.

This is in line with one of its core strategic pillars for enhanced market performance and growth via sustaining a “strong investor protection” framework,.

It was made clear that the sanction is not a new proposal but part of the already existing General Undertaking in The Exchange’s Listings Requirements, which was executed by every Issuer before its securities were approved for listing on The NSE.

Ms. Tinuade Awe, head of Legal and Regulation Division at The NSE, stated that before securities are approved for listing on The Exchange, every Issuer has to execute a document known as the General Undertaking. The General Undertaking sets out the obligations imposed on an Issuer.

These commitments include the obligation to notify The Exchange prior to taking certain corporate actions; the obligation to seek The Exchange’s approval before publishing certain information; the obligation to comply with The Exchange’s Listings Rules; the obligation to comply with the directives of its shareholders in the event of declaration of dividends.

“These obligations kick in once an Issuer executes the General Undertaking. They are obligations of long standing, which remain binding for as long as an Issuer is listed on The Exchange. Section 14 of the General Undertaking, which is one of the Listings Requirements sets forth the sanctions for violations of the Rules.  Section 14(e) provides that failure of a listed company to pay dividend on the due date shall attract a fine of 5% of the total dividend amount declared.  (For the entirety of Section 14, please see our Listings Rules at http://www.nse.com.ng/regulation/issuer-regulation/rules-guidelines; ‘The Green Book’ page 57)” said Awe.

“On 21 July 2014, in connection with the publication of certain amendments to the Listings Rules which were approved by the Securities and Exchange Commission (SEC) on 19 May 2014, The Exchange republished the sanctions provisions of its Listings Rules, i.e., Section 14 on its website. Although Section 14 was published with the amendments, which are new, as explained above the Section is not new. 

Ergo, Section 14(e) is not a new provision.  It is unequivocally binding on every Issuer whose securities are listed on The Exchange. 

Indeed, The Exchange republished Section 14 of the General Undertaking as Rule 30.5 of the SEC approved “Amendments to the Listings Rules” in order to remind Issuers of their obligations and the corresponding sanctions under the Listings Rules” added Awe.

Commenting on the issue, Mrs Josephine Igbinosun,  head of Listings Regulation at The Exchange, noted that there were a host of reasons why The Exchange may penalize specific conduct. In the instant case, there are two primary reasons, namely: to encourage a change in unacceptable behaviour; and to act as deterrent against engaging in conduct which violates applicable rules.

By imposing the 5% sanction set forth in Section 14(e) in the event of a breach regarding the payment of dividends as directed by shareholders, The Exchange is enforcing the payment of dividends to shareholders, in line with their resolution to receive same on a specific date. In essence, Section 14(e) sends a reminder to the directors of the Issuer that the directives of the shareholders in general meetings must be obeyed. 

“The Exchange wishes to draw the attention of the investing public to the SEC Rule (2013) Part B, Rule 44(1) on Payment of Dividends which also imposes an obligation on Issuers to ensure payment of dividends declared to shareholders not later than seven (7) working days after the Annual General Meeting (AGM) at which the dividend was declared. Rule 601(7) of the SEC Rules provides for Administrative Sanctions; and empowers the SEC to impose fines for non-compliance with its Rules and Regulations.

Finally, in order to avoid engaging in conducts prohibited by the Listings Rules, The Exchange encourages all Issuers to enhance their internal systems and controls; and improve their awareness of the Listings Rules and their obligations thereunder. Moreover, The Exchange strongly advises against shareholder apathy and encourages shareholders to educate themselves on the provisions of the Listings Rules” added Igbinosun.

She further stated that The NSE recently upgraded its website so as to make information about Issuers, The Exchange and the Nigerian Capital Market more accessible to investors and other stakeholders. Interested parties may wish to visit the website.


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E-Financial

NAICOM Urges State Governments to Implement Compulsory Insurance

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The National Insurance Commission, NAICOM, is seeking collaboration especially from State Governments on implementation and enforcement of compulsory insurance.

Speaking during a meeting with the Governor of Ekiti State, Kayode Fayemi, the Commissioner for Insurance Sunday Thomas, noted that over the years, the Commission has embarked on series of programs aimed at a nationwide massive public enlightenment with respect to compliance with the laws on compulsory insurance.

As a subset of the Financial Services Industry, Insurance industry is a pivot to guarantee the sustainability of growth and development of the State and its people, said Thomas, adding, We have therefore noted the necessity to plant “Insurance” and “People” at the center of any equation that tends to create, enhance, sustain and manage growth and development in any economy.”

He said: “As a people, human activities have associated risks and in spite of every precautionary measure to avoid the occurrence of losses or damages, the unexpected still occur.

“In consequence of the losses the victims are prone to sufferings which in many cases may lead to total impoverishment of a large proportion of those affected. To ameliorate the situation of victims, laws have been put in place for an arrangement that will ensure that victims and especially third parties are adequately compensated.”

According to him, “the objectives of protecting third parties and relieving the government of the avoidable burden of compensation from the meagre wallet of the government led to the enactment of various laws on compulsory insurance products”.

Thomas listed the Compulsory Insurances to include, all buildings under construction that are more than two (2) floors (builders liability); all Public Buildings including Schools, offices, hotels, hospitals, markets (occupiers liability) etc; Group Life Insurance for all Employees of both Public and Private Sectors; Professional Indemnity for all Medical Practitioners and Third Party Motor Vehicle Insurance in respect of death, injury or damage to the property of third parties.

The Commissioner added that it is on the strength of the above that the Commission is seeking collaboration with the State government in the enforcement of the above mentioned compulsory insurances in the State.

“As the Chairman of the Nigerian Governors’ Forum there is no better place to start the campaign than Ekiti State.” he said.

He also highlighted the benefits of this collaboration with State Governments, which include, Financial Compensation to the families of insured citizens who may become victims of a disaster through loss of their properties or become disabled in event of occurrence of insured accidents/disasters, robust group life insurance policy made compulsory by the Pension Reform Act 2014 gives hope to the workforce who will be ready to go extra mile in carrying out assign duties knowing fully well that the employer has made provision for the dependant in event of the unexpected and creation  of employment opportunities for citizens of the State.

Others are provision of grants and Fire-Fighting Equipment for the States’ Fire Services by NAICOM from the Fire Fund as stipulated in the Insurance Act 2003, reduction in the government expenditure in event of disaster that may affect the citizens of the State by shifting the burden to the risk-bearers (Insurance Companies), free Insurance and Risk Management Education and Enlightenment programme for the citizens of the State; and creation of additional source of internally generated revenue (IGR) for State Government in collaboration with your relevant Ministries and Agencies.

He therefore appealed to the Governor to graciously consider the benefits of the proposed collaboration for the enrichment of the State and the sustainability of the Nigeria economy at large.

The Commissioner also requested the Governor to domesticate the compulsory insurances in the State and create a structure that can be supported by NAICOM in the enforcement of the compulsory insurances and also nominate an Agency of the Government that will serve as liaison office with the Commission in this collaboration.

“The nominated agency may be requested to work with the Team of the state who shall be dedicated to this collaboration and recommend appropriate measure to domesticate the enforcement of the compulsory insurances in the State.” he said.


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CBN Disburses N3.5tr COVID-19 Intervention Cash

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Central Bank of Nigeria (CBN) had disbursed N3.5 trillion to different sectors of the economy to cushion the effects of the Coronavirus pandemic.

CBN Disburses N3.5tr COVID-19 Intervention Cash

Mr. Godwin Emefiele, CBN governor

It will also contribute N1.8 trillion into the N2.30 trillion Federal Government’s one-year Economic Sustainability Plan (ESP) through its Participating Financial Institutions (PFIs).

Godwin Emefiele, CBN Governor stated this on Tuesday after the Monetary Policy Committee (MPC) meeting in Abuja.

Emefiele gave a breakdown of who got what out of the N3.5 trillion COVID-19 intervention as follows: Real Sector (N216.87 billion); COVID-19 Targeted Credit Facility (N73.69 billion); Agri-Business/Small and Medium Enterprise Investment Scheme (N54.66 billion); Pharmaceutical and Health Care Support (N44.47 billion); and Creative Industry Financing (N2.93 billion).

Under the Real Sector Funds, Emefiele said: “a total of 87 projects that include 53 manufacturing, 21 agriculture and 13 service projects were funded.

He added: “In the health care sector, 41 projects which include 16 pharmaceuticals and 25 hospital and health care services were funded.”

The CBN boss also said: “Under the Targeted Credit Facility, 120,074 applicants received financial support for investment capital.

“The AGSMEIS intervention has been extended to a total of 14,638 applicants, while 250 Small and Medium Enterprises (SMEs), predominantly the youth, have benefited from the Creative Industry Financing Initiative.”

Emefiele said in addition to  the  initiatives, the   apex bank “is set to contribute over N1.8 trillion of the total sum of N2.30 trillion needed for the one year  ESP, through its various financing interventions using the  PFIs.”


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Banks Fingered in $2trn Dirty Money Scam

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Some of the world’s top banks have been found to be complicit in aiding criminals move $2 trillion in dirty money around the world, according to leaked government files.

Banks Fingered in $2trn Dirty Money Scam

The exposition was done by Buzzfeed News and shared with the International Consortium of Investigative Journalists (ICIJ), a group that brings together investigative journalists from around the world, which distributed them to 108 news organisations in 88 countries.

In the revealing documents, they said: “global banks including JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank, Bank of New York Mellon, among others defied money laundering crackdowns by moving staggering sums of illicit cash for shadowy characters and criminal networks that have spread chaos and undermined democracy around the world.”

It was also revealed that they kept profiting from these powerful and dangerous players even after the United States authorities fined these financial institutions for earlier failures to stem flows of dirty money.

FinCEN is the US Financial Crimes Enforcement Network. These are the people at the US Treasury who combat financial crime. Concerns about transactions made in US dollars need to be sent to FinCEN, even if they took place outside the US.

Known as the FinCEN files, these are more than 2,600 documents which banks sent to the US authorities between 2000 and 2017 which help show that these banks raise concerns about what their clients might be doing.

They have also been regarded as some of the international banking system’s most closely guarded secrets.

Some of what has been found so far showed that JPMorgan, the largest bank based in the United States, moved money for people and companies tied to the massive looting of public funds in Malaysia, Venezuela and Ukraine, the leaked documents reveal.

The bank moved more than $1 billion for the fugitive financier behind Malaysia’s 1MDB scandal, the records show, and more than $2 million for a young energy mogul’s company that has been accused of cheating Venezuela’s government and helping cause electrical blackouts that crippled large parts of the country.

JPMorgan also processed more than $50 million in payments over a decade, the records show, for Paul Manafort, the former campaign manager for President Donald Trump. The bank shuttled at least $6.9 million in Manafort transactions in the 14 months after he resigned from the campaign amid a swirl of money laundering and corruption allegations spawning from his work with a pro-Russian political party in Ukraine.

It was also revealed that one of Russian President Vladimir Putin’s closest associates used Barclays bank in London to avoid sanctions which were meant to stop him from using financial services in the West. Some of the cash was used to buy works of art.

HSBC allowed fraudsters to transfer millions of dollars around the world even after it had learned of their scam, leaked secret files show.

Britain’s biggest bank moved the money through its US business to HSBC accounts in Hong Kong in 2013 and 2014.

The United Arab Emirates’ central bank failed to act on warnings about a local firm which was helping Iran evade sanctions.

Deutsche Bank moved money launderers’ dirty money for organised crime, terrorists and drug traffickers.

Standard Chartered moved cash for Arab Bank for more than a decade after clients’ accounts at the Jordanian bank had been used in funding terrorism.

The FinCEN Files represent less than 0.02 per cent of the more than 12 million suspicious activity reports that financial institutions filed with FinCEN between 2011 and 2017.

Mr Fergus Shiel from ICIJ said the leaked files were an “insight into what banks know about the vast flows of dirty money across the globe”. He said the documents also highlighted the extraordinarily large amounts of money involved.


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