Shareholders Task Nestle Nigeria On Bonus, N5.8bn Unclaimed Dividend

Shareholders of food, beverages and confectioneries giant- Nestle Nigeria, on Tuesday, reminded the board of the need to expedite action on a bonus issue that would enhance trading of its shares on the Nigerian Stock Exchange (NSE), leading to further price discovery.
Speaking at the 50th annual general meeting of the company in Lagos, the shareholders recalled that they have been clamoring for the share split for the past eight years, adding that there is no better time for such than now when the company celebrates 40 years since it was first listed on the NSE.

Nona Awoh, a shareholder, for example, argued that given the size of Nestle Nigeria’s paid-up capital, reserve, and revenue, among others, a bonus issue will not be out of place.
Of the 792,656,352 million shares paid-up capital of Nestle Nigeria, according to its latest audited financials, 524,559,457 units, or 66.18% are held by the parent company- Nestle S.A. Switzerland, while 268,096,793 units, representing 33.82%, are held by the minority shareholders, including the 8.37% by Stanbic IBTC Nominees.

That, according to Awoh, means the minority shareholders are the ones who “trade the shares and make the price,” hence the need to make more units available to enhance its liquidity.
Supporting the argument, Boniface Okezie, another shareholder regretted that it has taken so long for the majority owners to consider the clamor of the minority shareholders for a bonus issue.
While appreciating management for the N58.50 total dividend payout per share, he called for a one-for-one bonus issue, just as he spoke of the need to further domesticate the company by empowering the farmers to produce more to increase the local raw materials, thereby conserving foreign exchange.

Also, Sir Sunny Nwosu, national coordinator emeritus of the Independent Shareholders Association of Nigeria (ISAN), expressed satisfaction with the dividend payout but wanted assurance that after paying out every of its net profit for the year under review, the management of Nestle has funds for its operations and research.
Awoh appreciated the fact that the 2018 full-year N43.008bn net profit is its biggest so far, from the previous year’s N33.723bn, helped by the significant drop in finance cost, among others. He challenged the management to raise its export earnings, thereby balancing import and exports.

The fact that the company imported goods and raw materials worth N77.8bn in the year under review and exported goods worth just N3.5bn is not good enough urging the board to formulate a policy in this regard.
Besides urging the parent company to consider one board seat for a representative of Nigerian minority shareholder, Awoh was also unhappy with the huge N5.8bn unclaimed dividend in the books of Nestle Nigeria, calling for a collaboration with the Securities & Exchange Commission (SEC) to significantly crash the number.

“We can’t continue like this… We can’t continue to allow this happen… How much did we (the company) earn from the money?”
Continuing, he challenged the board to “help promote and Nigerians the office of the chief executive (of Nestle Nigeria). The last Nigerian that occupied the office was Chief Olusegun Osunkeye between June 1988 and June 1999, when he became chairman of the board.
For him, “you can’t have all of the plum jobs on the management… Nigerians must be a proper player in the coalition.”
On his part, Chief Timothy Adesiyan, former chairman of the Nigeria Shareholders Solidarity Association, appreciated the 28% growth in net profit but challenged the proposition by the SEC that companies would stop sharing corporate gifts at their AGMs, a move many shareholders who spoke at the meeting described as insensitive.
The sign of dissatisfaction was shown very early in the course of the meeting, while the SEC representatives were being introduced, with shareholders booing them.

Explaining, Nwosu explained that the SEC representatives were booed for the decision of the commission to interfere in matters that are not altogether the biggest problem of the nation’s capital market today.
He believes that dialogue with stakeholders should have come before the move.
On her part, Mrs. Bisi Bakare, another shareholder was unhappy about the significant increase in executive and board compensation by the company.

Speaking later, the chairman, David Ifezulike, said the issue of bonus issue will continue to be a review, even as he noted the need to balance the interest of both the majority and minority shareholders.
Nestle Nigeria, he said, has continued to do well, despite the country’s difficult operating environment arising from the huge infrastructure deficit, assuring has invested heavily in backward integration, following which there are some of its products with 100% local raw materials

https://investdata.com.ng/2019/05/shareholders-task-nestle-nigeria-on-bonus-n5-8bn-unclaimed-dividend/