Stakeholders urge regulators to protect shareholders from exploitation
Stakeholders in the Nigerian equities market have called on the capital market regulators to guard against practices of listed companies and their board members that exploit minority shareholders.
Retail investors who preferred to speak to Daily Times on condition of anonymity said that such exploited manifest in so many way as it always end up impoverishing the investors while te board members smile to their banks.
A retail investor, who spoke on condition of anonymity allege that, such unethical practices manifest through building up operating expenses, cost of sales and internal loan mechanisms which in most cases are not repaid but eventually written off as bad debts.
“Do you know that some of these board members use proxies or their affiliate companies to borrow money from heir companies, or even secure contract from their companies. Cost of such contracts are usually over bloated and paid, but may never be executed or partially executed” the retail shareholder divulged”
The stakeholder said that corporate looting, or board members making money illegally from their companies had impacted negatively on fortunes of investors and returns on their investments.
The investor pointed that one of such exploitation manifested in a listed company that failed to pay dividend for three years and later repaid shareholders N1.00 per share for their investments in the firm.
He alleged that Avon crown falls into the category of such firms that appeared to have undermined shareholders investments.
The company, he said repaid shareholders N1.00 per share for their investments. He urged the regulators to enact a law that once a company use d the market to raise funds, they should be bound by law not to voluntarily delist or buy back their shares at their own rate.
“Once you have used us as spring board to borrow money from the market, you cannot delist, and don’t say that you are buying back your shares at your own rate” the retail investor said.
Bonny Amadi
