Continued from yesterday…
Reacting, our source noted that it is one of the issues the directors of Union Property Company Limited must explain whenever the AGM holds, including whether Union Trustees bought the shares from existing shareholders and when. Also for resolution is from who were the shares purchased and whether, Union Properties being a private limited liability, the existing shareholders were given the right of first refusal as required.
Even before the Union Trustees was allotted 19.36% stake in Union Properties, the shareholder argued that stakes of the significant investors ought to be half of what they now claim, following which Union Bank’s holding becomes 26%; and 5.87% for each of Union Homes and Union Assurance, which later became known as Ensure Insurance Plc.
Worse still, the directors continued to pay dividend based on the allegedly manipulated shareholding, he noted, following which for the year 2015, the board proposed a dividend of N1.013 billion or 18 kobo per share on each of the 5.626 billion units of N1.00 shares for the pioneering period between April 1, 2009 and March 31, 2014.
Curiously, the company in the same document recommended the payment of N1.959 billion for the period ended “December 31, 2013 of the profit reserved.”
The source recalled that this is not the first strange occurrence as the directors in 2008 recommended what they called “interest” for payment, a situation that was reported to the Central Bank of Nigeria (CBN), which forced them to appropriately reclassify the payment as “interim dividend.”
Alluding the fact that the company’s troubles are not new, Somuyiwa Sonubi, the Company Secretary, had in the 2014 annual report noted that plans of Union Bank to divest from Union Properties was frustrated by a court process instituted by some shareholders. He said Union Bank obtained CBN approval for the divestment in May 2013 to sell off its non- banking subsidiaries within 18 months from the date of the approval, which lapsed in November 2014 because of a pending litigation.
The court process, Sonubi stressed, was instituted “by some of the company’s shareholders in respect of the private placement conducted by the company in 2006 (following which) the directors of the company have suspended the divestment process until such time as the pending litigation is resolved.”
The directors expressed confidence that the litigation “is not expected to have any significant impact on the entity.”
For giving the company a clean bill of health and failing to qualified the account, the shareholders also plan to drag KPMG before ICAN, alleging that its officials colluded with the directors of Union Properties to manipulate the books.
“The account ought to have been qualified by the auditors, but they gave (Union Properties) a clean bill of health. If they do not put our books in proper shape, we will take them up… KPMG cannot be a party to this. Fraud is fraud,” the shareholder insisted.
The shareholders also plan to drag company before the Securities & Exchange Commission (SEC) for suddenly converting into a public limited liability (PLC) in its 2015 report without recourse to approval at an annual general meeting.