Unresolved Board Differences led to NAICOM Intervention in IEI Plc


Monday, June 08, 2015 16.39PM / Share Support Service

Investigations into the take-over of the board of International Energy Insurance (IEI) Plc has revealed that a series of long standing disagreements and in-fighting by board of directors led to their dissolution and subsequent appointment of an Interim Management Board by NAICOM.

Discussions with some of the principal actors in the entity reveals that a number of issues, which were known to the regulators had been on since 2009 when the institution allegedly had to go borrow funds through the assistance of POC to meet its dividend obligations.

By 2010, a target inspection by NAICOM had revealed a number of issues, chief of which was the status of the 2008/09 loan from KDB Daweoo Securities (appox. N2billion) had become an issue necessitating the bringing in of consultants/advisors to assist with the negotiations, including a court case in the United Kingdom. This was not resolved till 2013, when at an AGM to consider the 2011 financial report, shareholders were informed of the successful re-negotiation of the debt when its then Chairman, Mr. Patrick Ugboma, said “with the conversion of Daewoo Securities’ debt to redeemable preference shares, and having secured the approval of the regulatory authorities and owners, the company had crossed a major hurdle in its business strategy and was now well positioned to make good profit for the benefit of shareholders.”

Adding to this optimism was the Managing Director, Mrs. Roseline Ekeng, who said “We are, however, optimistic that the restructuring measures being put in place by our company will no doubt impact positively on our bottom-line in no distant time.”

The firm, at that occasion affirmed that it had returned its share price to N2.50 effective June 21, 2013 following the 5 for 1 share reconstruction conducted in and around 2012 which had to happen to stop Daewoo from taking over the company and address solvency issues.

The stage it would appear had been set for more challenges ahead under excruciating pangs of the financial crisis and the quality of investment decision made.

That NAICOM approved the 2011 and 2012 accounts was a testament to the level of hand-holding that took place to help turn the company around.

It is instructive to note that the composition of the board of directors included three (3) nominees of the Rivers State Government who had 35% share of the company, the Chairman and founder who had 5% and the other directors with various stakeholding.

Against this background, the company it would appear, converted the status of the consultants brought it to executive directors - Messrs Callistus Udalor and Tosayee Ogbomo to ostensibly, strengthen the management capability of the company to manage the business. By September 15, 2014, and by a resolution of the Board of Directors sent to the NSE, these two directors were removed and the market duly informed a decision challenged by the affected entities and is yet to be ratified at a properly convened Annual General Meeting.

Indeed, no AGM has held since and no accounts have been approved / published for the years 2013 and 2014.

In the course of our enquiries, we equally discovered that the founding Chairman, Mr. Ugboma was also removed by the board, a decision we understand he is equally disputing.

Against this backdrop, there have been allegations, accusations and counter-narratives about the utilization of funds, evidence of fictitious assets discovered in the books and over-reaching by parties

Lately and before NAICOM, moved in, a group of shareholders had obtained a Corporate Affairs Commission (CAC) approved mandate to hold an EGM in Calabar, Nigeria on May 28, 2015 for shareholders and investors to take far reaching decisions that would have led to the removal of existing directors of the company. This move was challenged successfully by the company with support from other shareholders who obtained a court order to that effect in addition to the withdrawal of the approval to go ahead by the CAC

The Company Clarifies Gaps

In the course of our investor centric interest, the Share Support Service met with the Head, Corporate Communication of IEI Plc, Mr. Tamuno Kiri, who clarified a few of the gaps in information published/publicly available, viz:

Here are a few of the Q & A that ensued:

1.       What is the status of affairs in the company that necessitated NAICOM’s involvement?

Refer to the Statement by IEI published in The Punch on 25th May, 2015.  Statement by IEI Plc on the take-over by NAICOM

2. When will the financials of the company be ready (and why was there no communication with investors when this post-listing requirement was not complied with)?

I am unable to confirm specifically when the financials will be released as it is the function of the board to do that. Further, regulatory approval from NAICOM is a factor/responsible for the delay of the financials. The 2013 accounts has scaled through NAICOM’s approval and it is just left for the board to release it while the 2014 Audited financials is with NAICOM.


3.       Further to a publication in the Punch Newspaper that the CAC has withdrawn its letter approving an EGM for May 28, 2015 – Can you give us the official version to ensure that the investing public has up-to-date and verifiable information?

This has been addressed via phone on Sunday and published on Monday…. Statement by IEI Plc on the take-over by NAICOM


4.       What should investors look forward to with regards to the going concern status of the business (and perhaps rationale for closing down branches).

He said IEI is a profitable company? The company in its Q1’15 financials made N1.4bn and also paid claims falling due (NB: This information has not been released to the market)


5.       The issue of investments in Heritage Bank as mentioned in one of our reports will be good to know (given the documentations seen on same) – if only to assure investors that information from the company is credible.

IEI has no investment(s) in Heritage Bank.

Mr. Kiri cited the issue of the three (3) subsidiaries of IEI Plc viz: IEI Assets Ltd., IEI Mortgages Ltd and IEI Anchor Pension Managers Ltd; and their impact on the group in the past - subsidiaries that were not making profit then which eventually led to a depletion in their shareholders fund. Right now, IEI has divested from those three entities as they now have their own core investors.

He described IEI Plc as a profitable company as the entity is no longer carrying the burden of the subsidiaries which severely impacted the group results. He further stated that the company in its Q1 2015 figures recorded N1, 421,323,367.41bn as total collection figures and paid out N474, 399,034.30 as claims. 

Related News

1.       Statement by IEI Plc on the take-over by NAICOM

2.    Now that NAICOM has removed the IEI Plc Board, What Next?

3.    IEI PLC Announces the Appointment of Interim Management Board by NAICOM

4.    IEI’s Planned EGM Put on Hold; Company to Announce New Date for AGM/EGM

5.    IEI Plc: Performing Below Listing Standards, Investors lost 93.34%, Awaits 2013 and 2014 Financials – May 13, 2015

6.    International Energy Insurance’s finances & role in Heritage Bank called to question by shareholder

7.    INTENEGINS Removes Messrs Callistus Udalor and Tosayee Ogbomo as Directors – Feb 2, 2015

8.    International Energy Insurance Plc announces Share Reconstruction – June 5, 2013 

9.    IEI renegotiates Daewoo Securities' debt – June 10, 2013  The Punch

10. International Energy Insurance (IEI) Plc declares ... – June 11, 2012

11. International Energy Insurance Plc appoints new Registrar PAC Capital & Trust Ltd ... - May 17, 2012 

12. INTENEGINS declares N403.98million loss in 12 Audited result SP N0.53k

13. INTENEGINS declares N4.7b loss in 11 Audited result SP N0.52k

14. International Energy Insurance Plc Investors Relations Page

15. NSE X-Compliance Report as at 28th May, 2015


Related News