Notwithstanding the many benefits derivable from the newly-amended Companies and Allied Matters Act (CAMA) 2020, publishing unclaimed dividends in two national dailies as stated in the Act exposes shareholders’ information to fraudsters, the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN), has warned.
The Institute noted that although the Act gave opportunity to shareholders to have their names on record, however, it exposes their data to the public, thereby denying them data privacy.
President and Chairman of Council, ICSAN, Bode Ayeku, who commended President Muhammadu Buhari for assenting to the Bill, said the Act, though laudable, has some controversial provisions as well as missed opportunities, which to a large extent, do not make it fit into the new normal as a result of COVID-19 outbreak.
He continued, “Apart from data privacy, fraudsters would now have the opportunity to creatively think of something to access dividends of innocent shareholders. I think the Corporate Affairs Commission (CAC), and the government need to look into this.
“Making publicity is an avenue for shareholders to be aware that they have outstanding dividends, but we must be mindful of the implications. We should not open the floodgate for fraudsters. With technology, a lot of fraudsters are capitalising on the systems to hijack shareholders’ unclaimed dividends. Government, through the CAC, should ensure this is handled in a productive way.”
He advised that companies could forward the list with annual reports attached to the shareholders themselves to prevent cyber criminals.
Ayeku noted that the new legislation has a requirement of five persons in the audit committee, unlike six persons in the old CAMA, which provided equal membership of directors and shareholders. In the new CAMA, shareholders’ representatives are three persons while representatives of non-executive directors are two.
The challenge, according to him, is that many companies have held their Annual General Meetings (AGMs) recently, and have complied with the law with an equal membership audit committee before the passage of the new legislation.
“So what are we now going to do? The election of Audit Committee members can only be done at AGMs. Will companies now call an extraordinary general meeting in order to reduce the members of the Audit Committee? That is one of the challenges, and I do not know how we are going to cope with that.”
Against this backdrop, he urged companies to maintain the status quo until they’re able to make amends and fully comply in the next AGM.
Furthermore, Ayeku said Nigeria needed legislation on how to manage AGMs, urging that virtual meetings should also be allowed for pension fund administrators (PFAs).
He added that since the CAC has embraced digital filing of documents, the agency should also come up with specific timelines to ease customers waiting time.