COVID-19 and AGM by Proxy: Lessons from GTBank Approach

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Thursday, March 26, 2020   /05:08 PM  / By Saheed Kiaribe / Header Image Credit: Financial Technology Africa

 

It is no longer news that the outbreak of the coronavirus pandemic (COVID-19) has brought about changes in the way we live and work including the holding of statutory meetings by companies.

 

Nations and health experts have been encouraging social distancing in an effort to curb the spread of the virus which has continued to affect economic lives globally. From Asia to Europe and now Africa, it has been similar experience and some have had to call for a lock down to curtail the spread.

 

Centre for Disease Control (CDCs), both at national and African Union levels, have issued guidelines for social distancing. The Nigerian Stock Exchange (NSE) in a circular to the market dated March 19, 2020 advised all listed companies that plan to hold their Annual General Meetings (AGM) to put in place adequate precautionary measures to ensure the safety of all stakeholders at the meetings.

 

While a few quoted companies listed on NSE have notified the market about the postponement of their AGMS due to the outbreak of COVID-19, GUARANTY, however has decided to go ahead with its AGM but with a modification which is to hold the AGM with attendance by proxy. Prominent among the firms that have postponed their AGMs are, UBA, TRANSCORP, TRANSCOHOT and NOTORE among others. See table below

 

COVID-19: Companies That Have Postponed AGMs

SN

Companies

Old AGM Date

New AGM Date

1

VANLEER

31-Mar-20

23-Jun-20

2

NOTORE

26-Mar-20

Until Further Notice

3

UBCAP

24-Mar-20

To Be Announced In Due Course

4

AFRIPRUD

23-Mar-20

Until Further Notice

5

TRANSCORP

25-Mar-20

Until Further Notice

6

UBA

27-Mar-20

To Be Announced In Due Course

7

TRANSCOHOT

24-Mar-20

Until Further Notice

8

MORISON

26-Mar-20

Until Further Notice

Source: NSE, Proshare Research

 

The decision by GUARANTY to hold its AGM on March 30, 2020 despite the directives by Lagos State Government to ban public gatherings of not more than twenty-five (25) people was premised on the fact that the bank has secured an approval from the Corporate Affairs Commission (CAC) to hold its AGM with attendance by proxy.

 

This implies that shareholders would be able to vote for or against each of the items on the ordinary and special businesses to be discussed at the AGM and the proxy form sent back to the registrars to act upon accordingly.

 

However, the idea of restricting the numbers of people that would be allowed into the venue of the AGM to the number the Lagos State Government permits for social/public gatherings as at the date of the meeting will have to be clarified further by the bank in conjunction with its registrars.

 

In an effort get clarity on the criteria that the bank will use in selecting the twenty-five (25) people that will be allowed to the venue of the AGM, emails were sent out last night to both GUARANTY and Datamax Registrars. Both firms are yet to respond to the emails as at the time of filing this report.

 

Screenshots of e-mails sent to GTBank and Datamax Registrars

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As a follow up, a call was put through to Datamax Registrars this morning to clarify this, the response from the contact at Datamax Registrars reflected that they are not cleared yet on the criteria to be used in determining the 25 persons that will gain entrance to the venue of the AGM. Similar call was put through to GUARANTY with no response received.

 

Will this be the new approach to holding AGMs amidst the COVID-19 health challenge or will there be lessons to pick up  from the bank's approach? Only time will tell.

 

For comments, clarification and feedback, send an email to research@proshareng.com

 

Proshare Nigeria Pvt. Ltd.

 

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