FRC Intervenes In Purported IGI Acquisition, Invites Coopvest Ltd  

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The Financial Reporting Council of Nigeria (FRC) has invited Coopvest Nigeria Ltd, the purported owners of 40 percent of Industrial and General Insurance (IGI) Plc to appear before it on 30th January following the petition by the minority shareholders of the company who alleged violation of statutory provisions in the acquisition of the shares.

The invitation to Coopvest is based on the petition to the financial statement regulator in which the minority shareholders alleged a scheme to acquire the company illegally, cheat and defraud the minority shareholders, and strip the assets of the company through a purported sale to an alleged nonexistent new core investor.

The shareholders who also petitioned the Securities and Exchange Commission (SEC), the National Insurance Commission (NAICOM), the Corporate Affairs Commission (CAC) and others, requested the FRC and others to determine the culpability of the past management of the company, the so-called core investor and other conspirators/collaborators/accomplices (if any) in the dastardly plot to acquire the company and its vast assets across Africa illegally and also, to set machinery in motion to punish this infraction accordingly.

Coopvest, an Ibadan-based company formed in November 2021, is promoted by two firms -Muhydeen Giwa Limited and HMS Concept, according to CAC records obtained by InsideBusinessNG in 2022. The company has now acquired the shares of IGI following the alleged exclusive favour from the former board of IGI Plc led by former Secretary to the Government of the Federation of Nigeria, Yayale Ahmed.

The former board, allegedly, without considering the other two intended prospective investors including Safrik Investment Ltd, a Cote d’Ivoire firm, consented to Coopvest for the 9,768,762,716 unissued shares representing 40.7 per cent equity of the insurance firm.

Coopvest Ltd, according to findings, offered 50 kobo per share, which brings the offer to about N4.88 billion, and which it claimed to have been injected into the insurance firm that is under liquidity pressure. The shareholders however alleged there is no evidence of physical injection despite the takeover of the company and the appointment of five directors directing the affairs of the company without being elected at either an AGM or an EGM.

The minority shareholders comprise Special Event Limited, Rotimi Fashola, Rotimi Edu, Toyin Fakunle, Alex Osula, Yemi Fatokun, Solaf Ventures, Obayomi Lawal, Sina Elusakin, Bashorun Oladipo Adegbite, Bandele Olabode Vincent, Incorporated Trustees of Ola Vincent Foundation, Taiwo Subuola Bali, and many others with substantial shareholdings in Industrial and General Insurance PLC (IGI) who are alarmed at the fraudulent and oppressive manner in which the company is now been administered by the current management in violent disregard of a subsisting court order in Suit No: FHC/L/CP/1699/2021 between Signet Ring Reality & Investment Limited & 7 Ors. V. Investment And General Insurance Company Plc & 7 Ors by Justice Akintayo Aluko of the Federal High Court.

The shareholders accused the current management of illegally taking over the company without an Annual General Meeting (AGM) for the years 2018, 2019, 2020, and 2021 to consider the accounts of the company before its shareholders as required, and as prescribed by the Companies and Allied Matters Act, 2020 (CAMA) which regulates the conduct of the ordinary business of companies and any special business.

The shareholders in their petitions to the regulatory bodies asked whether it was proper and lawful to sell IGI with no audited accounts for the years 2018,2019,2020,2021 and 2022 and also, without recourse to the shareholders for ratification at an AGM.

They also seek to know from NAICOM, SEC, FRC and the CAC whether the company can forward names of new directors to NAICOM without ratification at an AGM and the necessary resolution passed to that effect, and also, if the process of acquisition of the shares of the company can be completed without a completion board meeting and the necessary order of the Federal High Court to proceed with the transaction obtained.

Another request is whether there can be new shareholders and by implication members of the company when their names have not been compiled and entered into the register of members as required by the provisions of CAMA.

“There has to be cogent and verifiable reasons why these accounts cannot be placed before the AGM now as required by Law – the Companies and Allied Matters Act. This was a clear continuation of fraudulently carrying on the affairs of the Company, stated Adebola Lema from Fountain Court Partners, the counsel to the minority shareholders who signed the petition.

The petitioners also accused the purported owner of the 40 per cent shares of refusing their Pre-Emption Rights which can only be waived at the instance of the shareholders, saying that is against all known tenets of Company Law.

“It is unlawful for the company to do anything to induce or coerce the shareholder into a waiver. The opportunity to exercise the right must be given to all the shareholders. All existing shareholders are also entitled to full information on the amount of waivers received and what the company intends to do with them”.

They argued further that the former management of the company unlawfully and in flagrant disobedience of a subsisting court order identified a new core investor to whom they supposedly sold the controlling shares of IGI without first seeking the buy-in and input of the members of the company.

“CAMA and good corporate governance demands that full disclosure of every material information as regards the identity and promoters of the core investor, the deal they are offering and how that will affect the business of the company in the immediate and the long run must be made to the existing shareholders.

They also alleged that the purported new owners of the 40 percent company did not follow SEC Rules, comply with the compulsory provisions of CAMA in any private placement and refused to obtain the necessary resolutions from members of the company and Court orders where necessary to facilitate the sale of controlling shares to any entity.

IGI Insurance, founded in 1991, has endured liquidity challenges since the death in 2014 of Remi Olowude, its founder. The removal of Olowude’s subordinates, Rotimi Fashola and Sina Elusakin, from the board of the company, through a palace coup in 2017 worsened its plight.

Owing to the protracted liquidity challenge, efforts were geared towards attracting a new investor who could inject fresh funds to stabilise the company and the opportunity to dilute the ownership of the company came following the new Companies and Allied Matters Act (CAMA) rule which compels companies to sell their unissued shares by December 31, 2022.

Muhydeen Giwa Ltd, which has a 70 per cent holding in Coopvest Ltd, was registered by CAC on August 27, 2015, with Registration number 1283739. Its registered office is at 2, Olanrewaju Street, Lagos but the CAC record was silent on its line of business. It has two officers and they are Giwa Muhydeen Oladipupo, a director and Giwa Oluwafunmilayo Olubunmi.

Findings about HMS Concept, the second promoter of Coopvest Ltd, show that the company was incorporated by CAC on November 7, 2001, with RC number 433535. Its registered address is 25, Soun Ajagungbade Street, Ibadan, Oyo state, and it holds a 30 per cent shareholding in Coopvest Ltd.

HMS Concept has N500,000 share capital while its business activity, just like Muhydeen Giwa Ltd, is also not specified in the CAC records.

Further findings from the nation’s business registry in 2022 show that HMS Concept has five officers and they are, Kabir Ayinde Tukur, Olusola Ayinde Tukur, Akinwale Okunola, Olaniyi Fafowora, and Adekunmi Adedeji. The five who are directors have the same registered address.

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