The contending issues hindering demutualization of the Nigerian Stock Exchange (NSE) appear to have been finally resolved as members of the exchange have placed the issue top on its agenda in the exchange’s forth coming Annual General Meeting (AGM).
This endorsement of the NSE demutualization process was reached at the Extra-Ordinary General Meeting (EGM) of NSE members which held on Thursday, March 30, 2017, at the Stock Exchange House, Lagos.
Demutualization is the conversion of a non-profit, mutually owned company to a for-profit entity limited by shares. Demutualization segregates ownership and management from the trading rights of the members of an exchange.
Mr. Patrick Ezeagu, president, Association of Stock broking Houses of Nigeria (ASHON) moved the motion and was supported by Emeka Madubuike, Past President of ASHON.
Recall that the Nigerian Stock Exchange (NSE) on 23 June 2016, at its Annual General Meeting (AGM) suspended discussion on demutualization, with a promise to summon EGM soon, following ongoing discussions to address identified contending issues emerging from the process.
The three motions taken as one, moved by Ezeagu, supported by Mmadubuike, and unanimously endorsed by all the members are, authorization of the National Council and Management to proceed with the process leading up to the Demutualisation of The Exchange, endorsement of the engagement of financial advisers, legal advisers, tax advisers and any other adviser that may be required for the Demutualisation of The Exchange, and empowering the National Council and Management of NSE to do all such things and exercise all such powers as may be necessary or incidental to achieving the objective specified in demutualization, subject to applicable laws and regulations and obtaining the approvals of Members and the relevant regulatory authorities.
The NSE Council President, Mr. Aigboje Aig-Imoukhuede, read out the above three prayers as one. Oluwaseyi Abe, President Chartered Institute of Stockbrokers moved the motion for adoption of the prayers and was seconded by Oladipo Williams. The members thereafter voted unanimously in favour of the three prayers.
Mr. Aig-Imoukhuede having secured the members endorsement, noted that “the approval of the NSE demutualization plan marks the achievement of an important milestone towards completion of the exercise.
The demutualization of the Exchange will bring the Nigerian capital market on a par with other international jurisdictions, result in enhanced governance, transparency and visibility whilst attracting strategic partners, investors and good quality issuers. These are historic times indeed”.
Chief Executive Officer, NSE, Oscar Onyema, noted that “the approval of the demutualization process will generate substantial motivation for the development of an agile Exchange thereby consolidating its innovativeness and strengthening its leadership both at local and international levels whilst also adding value to its stakeholders.
As a demutualized entity that is profit-seeking, the NSE will be in a better stead to capitalize on new income opportunities, free from any limitations arising from conflicting member interests and existing laws and more importantly be able to better support the economic growth of Nigeria”.
Sam Ndata, doyen of the stockbrokers told newsmen that the members of the exchange gave the approval to the council to g ahead with the demutualization process and appoint all the parties to fast track the process.
He however disclosed that there was no time frame as to the commencement and conclusion of the process, adding that before the approval was secured, all contending issues to the process was effectively resolved by the Exchange.
Also, Mr. Mike Eze, CEO Crane Securities Limited told Daily Times during a telephone interview said that the process has been endorsed by members of the exchange at the extraordinary general meeting which held Thursday morning.