Stock market shareholders have threatened to sue the Nigerian Stock Exchange (NGX) Limited over its plan to raise an additional N35bn through a hybrid offering of equity and debt among other issues.
A letter titled, ‘Re: Notice of 61” Annual General Meeting of NGX Exchange Group Plc’ by solicitors to Mr Olayinka Olajuwon and Bamidele lbironke, who represented the shareholders, described the notice as “fraudulent, ill-advised” and abuse of office by the directors of the board.
The shareholders claimed that the resolution was in contrary to Section 142 (2) of the Companies and Allied Matters Act 2020, insisting that the law guiding the Exchange Limited does not give its Board of Directors any right to a lot of shares.
While scathing of the decision of the Board for the offerings, the shareholders said “It is unthinkable how incurring a debt burden of N15bn for the company will translate to raising capital for the company that remains a viable, highly regarded entity in the capital market with unissued shares,” thus declaring the notice as “egregious abuse of privilege by the board of directors.”
The shareholders further said the board’s decision contradicted Section 340 of SEC regulations, which provides guidelines for companies that wish to offer securities.
They added that the company had breached both the SEC’s regulations and CAMA Act.
The NGX, in a statement, said, “Nigerian Exchange Group Plc (and its subsidiaries) is and remains committed to the highest level of corporate governance with the overriding interest of maximising value for its shareholders.”