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 Bankreceived 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.”
Source: Daily Post