'In clear violation of the law' Access Bank’s First Guarantee Pensions takeover bid encounters fierce opposition

Access Bank Plc’s recent moves aimed at acquiring First Guarantee Pensions Limited (FGPL), a pension fund administrator (PFA), has been met with fierce opposition from shareholders who believe the process is illegal, specifically the Company and Allied Matters Act (CAMA) 2020.

The takeover bid is allegedly on the strength of recapitalisation efforts by PFAs to meet the minimum capital benchmark set by the regulator the National Pensions Commission (PenCom).

It is gathered that an Extraordinary General Meeting (EGM) was fixed for Tuesday April 5 in an apparent move to suspend the Preemptive Rights of shareholders and enable Access Bank buy out the shares of FGPL shareholders.

But some of the shareholders, in opposition to the move, are of the opinion that the ‘hurried deal’ is in clear violation of the law, especially as a statutory 28 days notice is required for an EGM in that regard.

It is not certain if their protest letters to FGPL and PENCOM since the less than two weeks notice was given were able to block today’s contested EGM. But indications are rife that both FGPL and Access Bank are determined to drive the process to a successful conclusion despite opposition.

It was gathered on good authority that, following the resistance the move to waive the preemptive rights of shareholders has been met with, the planned EGM was rescheduled at least twice before today’s (Tuesday) controversial meeting.

Despite protests by aggrieved shareholders, the controversial EGM was set to hold on Tuesday March 5 2022, subject to passing a special resolution of shareholders to abridge the CAMA- specified (28 days) notice period for the meeting.

Tuesday’s EGM is in proposition for suspension of the Articles and waiver of preemptive rights of members to be passed by special resolutions.

One of the proposed special resolutions to be adopted at the EGM is the suspension of the provisions of Articles 17 to 25 of FGPL’s Memorandum and Articles of of Association, for the purpose of the meeting.’

The Resolutions will result in the waiving of the preemptive rights of each shareholder and would permit the shareholders to offer their shares to a third party.

A Special Resolution is expected to be passed at the meeting to waive the 28 days’ notice period to facilitate the commencement of the EGM. A special resolution is also expected to be passed at the meeting to give every shareholder the right to take up their rights issue shares.

Opposing views within the shareholding structure of FGPL, however, believe that the arrangement clearly does not consider the illegality of the proposed resolutions whether passed by special resolutions or not.