Ex-Bank MD, Two Directors, Forfeit 56% Stake Of Goldlink ‘Without Cash Backing’

• Financials Reveal N4.245bn Shareholders’ Deficit

Almost two full years after the end of the financial year, directors of Goldlink Insurance Plc, on Monday presented its 2015 audited result, major highlights of which were the N4.245bn shareholders’ deficit that accentuates the need for urgent capital injection by the owners.
As if this was not grave enough, the company reported that at the end of an audit of its share capital by the former interim board and management, 2,548,774,014 shares were found to have been issued without cash backing between 1995 and 2006, out of which 1,348,549,941 units were surrendered and forfeited and thereafter treated as unissued shares with the approval of the Securities & Exchange Commission (SEC).
Among directors who forfeited shares in the process were Mr. Ralph Osayameh, former Managing Director of now liquidated Commerce Bank Ltd; Gbenga Afolayan, a former chairman of the company; and Femi Okunniyi.
According to the register of shareholders with significant holding, while Unity Kapital Assurance held 989,263,605 units or 30% of Goldlink directly, from 1,254,073,219 units or 27.56% in 2014; Enny Properties Ltd held 174,377,113 or 5.45% in 2015; while Osayameh’s stood at 559,957,088 units or 17.49% directly, as against 2.2% direct and 7.71% indirect in the preceding year.
Gbenga Afolayan no longer had any stake in the company, as against 284,486,025 or 6.25% direct and 313,276,372 units or 6.89%; just like Okunniyi, who in 2014 had 438,535,183 shares or 9.64% indirect and 274,335,882 shares directly in prior year had lost all of his stake.
Specifically, while Afolayan surrendered a total of 485,993,529 units or 36.03% of total affected, leaving him with 34,440,443 units, which represented the biggest haul; Femi Okunnyi followed with 378,391,883 shares or 28.05% and was left with 47,929,086 shares; while Osayameh gave up 214,124,550 units or 15.87%, leaving 559,957,088 shares. The trio therefore gave up a cumulative 79.95% of the total forfeited shares.
The implication of the forfeiture, the company explained, also meant that the share capital and share premium were reduced by N674,274,970.50 respectively.
The company’s share in issue therefore reduced from 4,549,947,000 units to 3,202,093,590 shares.
In its report and without qualifying its opinion, KPMG Professional Services, the external auditors drew attention to the company’s loss after tax of N350.206m for the period under review, just as total liabilities exceeded total assets by N4.245bn at a time minimum regulatory capital required to operate as composite insurer is N5bn.
Also worthy of note, according to the report signed by Kabir Okunlola,he partner in charge, was “the total admissible assets of the company less the net insurance contract liabilities and investment contract liabilities (which) was in deficit of N3.149bn as at 31 December 2015 for the general and life insurance businesses.”
These it continued, “indicate the existence of a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern.”
Specifically, while total assets stood at N1.849bn, total liabilities for the period was N6.095bn, resulting in the shareholder deficit which rose from N3.901bn.
Gross premium written for the period dropped to N2.537bn from N3.113bn; with gross premium income of N2.537bn from N3.737bn; and reinsurance expense rising to N472.094m from N395.509m, resulting in net premium income drop from N3.341bn to N2.065bn.
Loss before tax dropped marginally from N414.652m to N409.451m, following which income tax rebate of N49.245m reduced loss after tax to N350.206m, up from N529.207m following prior year’s tax expense of N114.555m.