Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) will henceforth impose sanction on any capital market operator or company that alters approved transaction document without approval of the Commission.
In a circular, SEC stated that any request for any change in an approved transaction document must be duly made to the Commission for its prior approval before effecting any such change, warning that altering approved transaction document without prior approval will attract sanctions.
According to the Commission, where any change is made to a transaction document after same has been approved or cleared by the Commission without the prior approval of the Commission, the relevant parties shall be sanctioned in accordance with the rules and regulations of the Commission.
“The Commission expects strict compliance with this directive,” SEC stated.
SEC noted that in addition to the complete filing directive of the Commission, all requests for amendments to transaction documents after approval or clearance by the Commission shall attract additional processing fee.
According to SEC, any request for a change, alteration, or amendment of documents after approval and clearance has been granted shall attract a processing fee of N1 million.
Meanwhile, the apex capital market regulator has clarified that “light refreshments” at annual general meetings (AGMs) are not considered as part of gifts prohibited under its rules banning distribution of gifts at AGMs.
Rule 602(4) of SEC states that ‘’public companies shall not distribute gifts to shareholders, observers and any other person at Annual General Meetings/Extra-Ordinary General Meetings’’.
The Commission stated that it considered it necessary to clarify that ‘’light refreshments’’ are not prohibited and do not fall under category of gifts prohibited by Rule 602(4).
With several cases of disruptions due to distribution of gifts at AGMs and alleged unethical behaviours by companies, SEC had issued new rules banning distribution of gifts and engaging any caucus of shareholders in group meeting prior to any of the general meeting.
Any company that violates the two rules shall be liable to a penalty of not less than N10 million.
Providing justification for the proposed rules, SEC stated that public companies spend a significant amount of money on corporate gifts at AGMs and EGMs and this has a great impact on their profitability.
SEC noted that few of the companies are making reasonable profits and even fewer can afford to pay dividends, adding that if the amount budgeted for gifts at AGMs or EGMs can be reserved for other relevant operational or administrative expenses, it would positively impact on the companies’ earnings per share.
“Furthermore, it has been observed that some companies arrange meetings with select groups of shareholders ahead of general meetings to discuss proposed resolutions and agree on strategies which are often detrimental to the interest of other shareholders,” SEC stated. Such meeting is known as pre-AGM meeting.
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