Finance Minister, Kemi Adeosun, yesterday, described as gladdening Nigeria’s 64th ranking among 140 countries on the protection of minority shareholders interest, comparing favourably with China, 71st; Brazil, 78th; and Russia 116th respectively in the latest World Economic Forum ranking index of 2013/2016.
The World Economic Forum index ranks countries yearly based on the strength of investor protection as well as on the protection of minority shareholders interest.
Adeosun said: ‘’Although we lag far behind South Africa which ranked 3rd globally, I therefore hope that this Study Team will look closely at best practice in other jurisdictions and how it could be applied to ensure stronger protection of minority shareholders in Nigeria.”
The minister stated this in a keynote address to the inauguration of the Study Team on ‘’Voice and Voting Power, – What Role for the Retail Shareholders in the Nigerian Capital Market’’ held in Abuja.
Represented by the Permanent Secretary in the Ministry, Mahmoud Isa Dutse, the minister said that despite the achievements recorded in the sector by the Securities and Exchange Commission in different areas in the market, efforts must be expedited to bring back minority shareholders and retail investors who fled the market following the painful market decline in 2008.
She said, ‘’In this regard the National investor protection Fund (NIPF) set up by SEC should assist towards boosting the confidence of such investors to not only return to the market but also become more active in the affairs of their companies’’.
She challenged the Study group to address the challenges of effectiveness of enforcement of rules and regulations, that the shareholders should not be made so powerful that they can constitute themselves into a ‘’Checkpoint’’ for the extraction of rent from company management stressing, ‘’We should look for the right balance in the power equation between the majority and the minority in the interest of the company and the economy at large’’.
She insisted that Nigeria needs retail shareholders with sufficient voice and voting power to ensure that corporate governance codes are effectively implemented to enable quoted companies access larger funding and achieve higher valuation of corporate assets.
Assuring active shareholders’ associations would also bring about greater hoper for effective implementation of the corporate governance framework, guaranteeing and encouraging many more investments on the stock exchange’’, she noted.
In his Welcome address, the Chairman /CEO, Susman & Associates Ltd and leader of the seven man committee of the Study Team, Dr. Shamsudden Usman said: ‘’We believe that this study will lay the foundation for the necessary changes that will bring back the people through the capital market, I am an investor myself, we suffered losses over the last three years, but there are issues that needed to be addressed and we hope that this study will come out with many of those issues and have the relevant bodies, regulatory and those who make the laws take actions on some of the raised issues.”
Usman said that the team is expected to complete its assignment in six months.