COVID-19: Take precautionary measures at AGMs, NSE warns listed companies

By Omobayo Azeez

In the light of the spreading coronavirus pandemic, management of the Nigerian Stock Exchange (NSE) has cautioned individual listed companies to be cautious organizing their Annual General Meetings (AGMs).

Listed companies in the country are in AGM season as many of them have already chosen dates for the once a year gathering of directors of companies and their shareholders while few others have already held the meeting.

In a circular to issuers on the conduct of 2020 AGMs of companies listed on the exchange released on Thursday, the NSE acknowledged it is aware that some listed companies have already scheduled their AGMs to hold in the near future.

The circular read, “Following the outbreak of the Novel Coronavirus (COVID-19) and pursuant to the provisions of Rule 19.1: Rules Relating to Board Meetings and General Meetings of Issuers, Rulebook of The Exchange, 2015 (Issuers’ Rules), The Nigerian Stock Exchange (The Exchange) wishes to advise 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.”

The NSE further counseled companies should get a copy of a guidance document on safe mass gatherings in Nigeria which is available on the website of the Nigeria Centre for Disease Control (NCDC).

It stated that companies that must hold their AGMs should adopt the safety procedures provided by the NCDC in preparation for their AGMs, adding that these procedures should be adequately communicated to all invitees to the AGM.

Meanwhile, management of the bourse reminded companies that may wish for postponement of their AGMs or those that are yet to schedule theirs of extant rules guiding the AGM exercise as contained in Rule 19.4(d) Responsibility of the Directors/Trustees in Relation to General Meetings, Rulebook of The Exchange, 2015 (Issuers’ Rules).

The rule stipulates that “if an Issuer fails to hold its annual general meeting within nine (9) months from the end of its financial year end or within such extended period as may be approved by the Corporate Affairs Commission; the Issuer shall file a report with The Exchange within ten (10) business days of the end of the stipulated period explaining the reasons for their default; and they shall make an announcement in that regard in at least two (2) national daily newspapers within five (5) business days of receiving The Exchange’s approval to make the announcement”.

Section 213(1) of the Companies and Allied Matters Act, L.F.N 2004 (CAMA) also provides that “Every company shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year, and shall specify the meeting as such in the notices calling it; and not more than 15 months shall elapse between the date of one annual general meeting of a company and that of the next.”

“Issuers are therefore advised to utilize the windows provided by these rules as may be appropriate while planning their AGMs.

Moreover, in appropriate cases, companies may have recourse to Section 213(1)(b) of CAMA which permits the Corporate Affairs Commission to extend the time within which an AGM may be held by a period not exceeding three (3) months,” the NSE said in its latest circular.