(Exclusive) Stock Exchange To Remove Directors From Sanctions For Failed Meetings

By Emmanuel Aziken, Editor

The Nigerian Stock Exchange has proposed amendments to its rules removing directors of listed companies from sanctions for violations on the holding of statutory meetings and attendant f its rules on statutory meetings.

The amendment is part of limited proposals to amend rules for the holding of annual meetings of directors and trustees of stock holders and bonds.

The proposals were unveiled at the weekend by the Exchange and is now being studied by the exchange before the final adoption or rejection of the proposals. by the listed companies and bond s which has been circulated and is presently being studied by stakeholders also alters the timing for                                                                                                                                                                                                 

Under the present rule, directors of listed companies and trustees of bonds were required to be individually or jointly held for sanctions in the event of a breach of the rules on the holding of statutory meetings.

The exchange is now proposing to remove the directors and trustees and leave in place the issuers as corporate institutions for sanctions.

The sanctions on the corporate companies would remain as deemed as appropriate by the exchange but not more than 50% of the listing fee.

Under the proposals, all listed companies would be expected to provide the exchange with any price sensitive information arising from a board meeting within 24 hours.

This is in addition to existing requirements on information on dividend recommendations and audited results.

Another change is on the timeline for notices to the exchange on meetings. In the past issuers had been required to inform the exchange of board meetings at which dividend or bonus decisions were to be taken. Such notices were to be served on the exchange at least 14 days before such meetings. Now the time requirement has been cut down to seven days and in addition to the bonus and dividend decisions, the exchange is to be informed of restructuring proposals and price sensitive information taken at board meetings.

Under section 19(3), a new requirements for timely release of information is being proposed requiring transmission of outcome of meetings within 24 hours.

It states: (c) Every Issuer shall notify The Exchange within twenty-four (24) hours after the relevant general meeting, of the resolutions passed and/or the outcome of the business transacted at the general meeting.

Apparently to sync with the removal of culpability of directors and trustees for failure to hold meetings, the exchange has wholly transferred the section on failure to hold statutory AGMs from section 19(4) dealing with Responsibility of the Directors / Trustees in Relation to General Meetings to a total new section 19(8).

Stakeholders in the capital market are expected to give their responses to the proposals in due course.

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