Afprint Nigeria, a company that has been struggling to survive over the past decade is embroiled in a fresh controversy. The shareholders of the company are frowning at the recent move by the company’s management to sell off its shares at N1.50 per unit to an interested investor. The shareholders believe this is not a fair deal for them, since the company was run aground due to inefficiencies and mismanagement by the leadership of the company. They insist that it is a giveaway price for a company whose share attracted as much as N10 per unit, only recently.
The opinion of minority shareholders of the company, it seems, was not properly taken into account before the decisions were reached. According to Olufemi Timothy, president, Renaissance Shareholders Association of Nigeria, “There has been an abuse in the court ordered scheme of arrangement undertaken by the company and the holders of its fully paid ordinary shares. We are against the scheme because it lacked fairness, reasonableness, due process, equity, rule of law and did not give good representation of the minority shareholders before and during the scheme implementation.”
The arrangement which was ordered by a federal high court, in Lagos, in the view of Olusegun Owolabi, managing director, Graceville Investment, was to ensure an amicable settlement of minority shareholders in the company following the alleged insolvency of the company and the inability of its management to run its operation to maximum capacity. But he explained that the the outstanding payment would be made to Kewalrams, its parent company, after 12 years as unclaimed. “This is absolutely unfair and it is fraudulent to take money belonging to minority. It did not account for the three subsidiaries of the company because no financial statement of the subsidiaries was disclosed to enable shareholders to know their value including their assets,” he said.
Sola Owoeye, an economist and another shareholder of the company, explained that the share price as at the time of cancellation of minority shares put at N1.50 were grossly under valued for a company that was worth N20 per 50 kobo at current current valuation. “It failed to disclose the current value of Afprint Nigeria asset on Apapa-Oshodi Expressway to serve their selfish interest,” he said.
Owoeye urged Securities and Exchange Commission, SEC, to correct the abnormalities and prevent reoccurrence of such incident in the future by other companies in the Nigerian capital market. “If the regulator is more proactive in its responsibilities in the market, it will help ensure good corporate governance in the company’s activities. A company the directors declared not profitable should have been wound-up to serve the interest of all stakeholders instead of a few majority holders taking the assets at such a giveaway price,” Timothy said. Efforts to get Siva Subramanian, managing director of the company, proved abortive as Bola Soyoye, a staff of the company said his boss was not available for comments.
When the Nigerian textile industry collapsed in the 1990s, Afprint fell with it. But the stock also witnessed a turnaround in June when it rose to N5.77 kobo from the 64 kobo it opened the year with. The once vibrant garment manufacturing company located on the Oshodi-Apapa Expressway, Isolo, Lagos, was converted into an auto shop and vegetable oil warehouse. Chanrai Nigeria and Springfield Agro, the motor and vegetable oil subsidiaries owned by Kewalrams have taken over some parts of the premises. But a substantial portion of the property has been sold to Leo Smart Limited, makers of Smart Pen and plastic containers and Olam Sesame & Redington Limited.
The company may be ’dead and buried’, but it is still alive in the Nigerian Stock Exchange. The company formerly listed under the textile subsector on the exchange was recently cross-listed under the agriculture/agro-allied sub-sector. The reason was the diversification of Kewalrams, the parent company, to keep it afloat. To some shareholders, the change of business from textile to automobiles and vegetable oil is a welcome development.
Nevertheless, they expressed regret that they were not informed before the change. Taiwo Oderinde, president, Corporate Shareholders Association of Nigeria, said he was shocked when he visited the company’s head office and discovered the sudden change in its line of business. “The divestment is good but the management ought to have informed investors before going into such. We are co-owners and we have the right to be aired before vital decisions are taken in our company,” he said.
Timothy: Kicks against sale of Afprint shares
Owolabi: This is absolutely unfair
Owoeye: Urges SEC to correct the abnormalities
Afprint Nigeri Nigeria: ‘Dead and buried but alive in NSE
Oderinde: Shocked |
