By Nkiruka Nnorom
SHAREHOLDERS of Nigerian Breweries Plc, NB, and the Board of Directors are on a collision path over the plan by the company to convert the N21 billion cash dividend earlier proposed by the directors to ordinary shares.
A cross section of shareholders, who spoke to Vanguard said they have resolved to vote against the motion when it comes up for approval at the Annual General Meeting, AGM, tomorrow.
According to them, the case has been reported to the Securities and Exchange Commission, SEC and the Nigerian Stock Exchange, NSE, for intervention.
Vanguard investigations show that the directors would still push the proposal successfully given their majority stake in the event the face off leads to a pool. It is not yet clear if the regulatory authorities are stepping in to douse the tension.
The NB’s Board of Directors had proposed N20.5 billion as final dividend, amounting to cash dividend of N2.58 per share, for the year ended December 2016. But the company later said it will seek shareholders approval at the AGM tomorrow to convert the cash dividend to scrip issue. According to the company, the conversion will help it to consolidate on its balance sheet.
But speaking exclusively to Vanguard, the shareholders insisted that dividend payment is their right and must be paid once it is declared.
Sir Sunny Nwosu, former National Coordinator, Independent Shareholders Association of Nigeria, ISAN, opined that the move is a ploy by the directors to increase their stake in the company as a first step towards eventual exit from the Exchange.
“We are totally against it because it is taking undue advantage of Nigerians. We are all aware that we are in recession and everybody needs every kobo; the directors do not need the dividend and, therefore, they want to use the scrip issue to increase their holding in the company. Whether it is one per cent or 001 per cent that the scrip issue will add to us as shareholders, it is not desirable to us.
“What they are saying is that they could not transfer their dividend. But they have been transferring their dividend for 70 years, so, why don’t they bear with us at this time of difficulty. It would have been better if they had not declared the dividend and allow the interim dividend to remain as the final dividend than declaring dividend and at the same time complaining that they want to plough back the money. It then means that the dividend declared can be classified as fake dividend,” Nwosu added.
Heric Akinduro, Chairman, Ibadan Zone Shareholders Association, said shareholders should be allowed to make a choice between converting their dividend to ordinary shares or going home with their dividend. “For those that have excess money, they can increase their holding, but for those that do not have, they should give them cash,” he said.
Agreeing with others, Patrick Ajudua, National Chairman, New Dimension Shareholders Association, NDSA, said: “We are totally against it. Once a company has declared dividend, it should keep to it. We are after our dividend because most of us have reduction in our purchasing power and the cash dividend will enhance our financial position and enable us to meet our obligations. This plan is not the best for us and that is why we are against it.”