- It must be compelled to render account of its interim committee’s activities in FGPL
IT is astonishing that snce the National Pension Commission (PenCom) took over First Guaranty Pensions Ltd (FGPL) on August 12, 2011, it has not held any Annual General Meeting (AGM) contrary to the provisions of the Companies and Allied Matters Act (CAMA). AGMs are supposed to be held at least once in a year. What this implies is that for this period, there has not been any audited account for the firm. Indeed, the company’s original owners are alleging that its fortunes have dwindled and that the company is being badly run.
If this is true, it is sad indeed.
PenCom took over FGPL sequel to a target examination barely a month after the regulator had affirmed it as the most performing pension fund administrator (PFA), thus making the takeover curious.
Expectedly, the matter has been the subject of litigation in several courts. Interestingly, PenCom and others that have taken FGPL’s owners to court have lost on all fronts so far. FGPL took the commission to the Federal High Court, Abuja, in 2011, alleging a breach of procedures by it. It said what PenCom ought to have done was to send its observations on the target examination to the company’s directors who would then submit same to the shareholders to vote on, and the result would determine the company’s fate; not a takeover by PenCom.
The court gave an ex parte order stopping all actions based on the target report, pending the determination of the substantive suit. This was communicated to PenCom. But, curiously, the regulator, which received the court’s order on August 12, 2011, dissolved the FGPL board and appointed an interim committee in its stead on August 15, 2011. However, on June 12, 2012, the court found merit in FGPL’s argument and quashed the target report in its entirety. Indeed, Justice D.U Okorowo upbraided PenCom for contempt of the order of the court and ordered that all parties should revert to the status quo ante.
The judgment was followed by all manner of subterfuges.
Instructively, the matter was of such concern that the Attorney-General of the Federation at the time, Mohammed Adoke, wrote letters to PenCom to respect the court’s judgment or show evidence that it had secured a stay of execution. Even the incumbent AGF and Minister of Justice, Abubakar Malami, had intervened to no avail.
There are other reasons why the real motive for FGPL’s takeover becomes the more questionable. Whereas the firm was on the verge of securing new accounts, including those of the Lagos State government, Central Bank of Nigeria (CBN), among other juicy accounts, when PenCom took it over, PenCom has, regrettably, not added a single account to what it met on ground. Indeed, it is now feared that the company might have lost its market share in the course of this intervention. It has not been able to pay any dividend since then, either.
There is an urgent need to compel PenCom to hold an AGM. The true position of the financial status of the company must be ascertained at least in the interest of the shareholders, and, more importantly, the contributors. It is not enough for the regulator to say that FGPL is doing well, when its books are not available for scrutiny. Neither can the regulator say it cannot conduct AGM because of the cases in court, having cherry-picked which aspects of a judgment to respect and which to disobey. The commission should know what to do, especially in the absence of a stay of execution of the judgment of Justice Okorowo nullifying its target report.
The new pension scheme came into being to enable retirees have a blissful retirement. What is playing out with FGPL may make this lofty dream a mirage. While it is doubtful if the regulator has any right to take over FGPL in the first place, it becomes the more puzzling whether this can be in perpetuity as it is fast turning out in the instant case.
We cannot deny PenCom the right of appeal that it is exercising in this matter, having lost serially in various courts, either by itself or through some other parties that had gone to court over the same or related matters. But questions can be asked over its handling of the company’s affairs in the last five years, especially as this can make the difference between life and death for millions of Nigerians who had chosen FGPL as their pension fund administrator.