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The Nigerian Stock Exchange (NSE or The Exchange), on Thursday announced that its members have approved the demutualisation programme of the Exchange.
Demutualisation is the process through which any member owned organisation becomes a shareholder-owned company. Basically, it refers to the conversion of a non-profit, mutually owned company to a for-profit entity limited by shares. Demutualisation segregates ownership and management from the trading rights of the members of an exchange.In a statement issued, the NSE said the decision was reached at the Extra-Ordinary General Meeting (EGM) of its members which held on Thursday, March 30, 2017, at the Stock Exchange House, Lagos.
At the meeting, Patrick Ezeagu, President Association of Stockbroking House of Nigeria (ASHON) moved the motion for the underlisted prayers to be taken as one and was supported by Emeka Madubuike, Past President of ASHON.
The approval motions read in parts; That the National Council and Management be and are hereby authorised to proceed with the process leading up to the Demutualisation of The Exchange; That the engagement of financial advisers, legal advisers, tax advisers and any other adviser that may be required for the Demutualisation of The Exchange be and is hereby ratified and approved; That the National Council and Management be and are hereby authorized to do all such things and exercise all such powers as may be necessary or incidental to achieving the objective specified in I above, subject to applicable laws and regulations and obtaining the approvals of Members and the relevant regulatory authorities.
The motion was unanimously adopted by members present with a show of hand.
Just as the NSE Council President, Mr. Aigboje Aig-Imoukhuede, proceeded to read out the above three prayers as one, Oluwaseyi Abe, President Chartered Institute of Stockbrokers moved the motion for adoption of the prayers and was seconded by Oladipo Williams. The members thereafter voted unanimously in favour of the three prayers.
In his remarks after the successful meeting, Aig-Imoukhuede noted that “the approval of the NSE demutualisation plan marks the achievement of an important milestone towards completion of the exercise,” saying “The demutualization of the Exchange will bring the Nigerian capital market on a par with other international jurisdictions, result in enhanced governance, transparency and visibility whilst attracting strategic partners, investors and good quality issuers. These are historic times indeed”.
In his comments, Chief Executive Officer of NSE, Oscar Onyema, averred that “the approval of the demutualisation process will generate substantial motivation for the development of an agile Exchange thereby consolidating its innovativeness and strengthening its leadership both at local and international levels whilst also adding value to its stakeholders.
As a demutualized entity that is profit-seeking, the NSE will be in a better stead to capitalize on new income opportunities, free from any limitations arising from conflicting member interests and existing laws and more importantly be able to better support the economic growth of Nigeria”.