Shareholders have unanimously lamented the huge fines
slammed on seven lenders by regulatory authorities as the penalties for certain
infractions during the 2018 business year.
Nairametrics understands that the banks, which include:
GTBank, Access Bank, United Bank for Africa (UBA), FBN Holdings, Sterling Bank,
Fidelity Bank, and Zenith International Bank, have all been mandated to pay a
total of N145 million in fines to regulators for various offences.
The N145 million fines are to be paid to the Central Bank of
Nigeria (CBN), the Securities and Exchange Commission (SEC), the Financial
Reporting Council of Nigeria (FRC), and the Corporate Affairs Commission (CAC).
More Details: As contained in the banks’ annual reports, FBN
Holdings and its subsidiaries, First Bank of Nigeria, FBN Quest Merchant Bank,
and FBN Insurance Limited, will pay the highest fine of N32.65 million to the
CBN. This is followed by UBA followed which will pay N30 million.
Similarly, GTBank was fined N24 million, Access Bank was
fined N20 million, Sterling Bank received N15.33 million fine, Fidelity Bank
N13.01 million, and Zenith International Bank got N10 million, respectively.
Shareholders’ Stance: The shareholders under the auspices of
New Dimension Shareholders Association, Shareholders Association of Nigeria,
and Proactive Shareholders Association, are protesting against the fines.
According to them, the penalties imposed on the banks
impacted negatively on their bottom-line, ultimately affected their dividend
payout.
The shareholders argued that rather than impose such huge
fines, the regulators should meet with the banks’ management to determine other
penalising strategies.
The President of New Dimension Shareholders Association,
Patrick Ajudua, said the fines did not just affect the dividend payment but
also had a negative effect on the shareholders’ fund.
“WE ARE NOT AGAINST PAYMENT OF FINES AS IT IS A MEASURE OF
CORRECTING FINANCIAL/GOVERNANCE BREACHES, BUT SUCH MUST BE DONE WITH HUMAN
FACE. THIS MEANS THAT THE STAFF THAT COMMITTED THE OFFENCE SHOULD BE PENALISED.
IF THIS IS DONE, IT WOULD FORESTALL FURTHER VIOLATIONS AND SERVE AS A DETERRENT
TO OTHERS.”
Meanwhile, the President of Proactive Shareholders
Association, Boniface Okezie said:
“NO DOUBT, IT IS AFFECTING THE SHAREHOLDERS’ DIVIDEND; IT IS
REALLY UNFORTUNATE. THE REGULATORS CAN WORK OUT OTHER WAYS OF PUNISHING BANKS
THAT CONTRAVENE THE LAW.”
Similarly, the President, Shareholders Association of
Nigeria, Ibadan Zone, Eric Akinduro said;
“THE QUESTION TO ASK IS WHETHER THE PENALTY IS PART OF THE
BUDGET PROVISION, IF YES? IT IS OK, BUT IF NO, THEN THE OFFICER RESPONSIBLE FOR
SUCH AN OFFENCE MUST BE HELD ACCOUNTABLE FOR THE NEGLIGENCE.
“THIS IS WHY SHAREHOLDERS SHOULD CONTINUE TO PUT THE BOARD
AND MANAGEMENT ON THEIR TOES. IF THE GAME IS PLAYED BY THE RULES, THERE WILL
NOT BE ANY REASON FOR CONTRAVENTION.”
By Damilare Famuyiwa
