Fraud allegations rock Guinea Insurance

Fraud allegations rock Guinea Insurance

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…as investors query chairman over ‘missing’ N500m

  • Acquisition looms – Stakeholders
  • No cause for alarm – MD

The shareholders of Guinea Insurance Plc have called for the sack of the Chairman of the company, Sir Emeka Offor, over what they describe as the lack of corporate governance in the company.

Investigations revealed that the development was as a result of the inability of the board of directors, led by Offor, to answer some questions asked by some shareholder groups during the company’s recent Annual General Meeting, held in Uyo, Akwa Ibom State.

Offor was alleged to have diverted about N500 million, which was supposed to be part of shareholders’ funds, to an unknown account. He was expected to have injected the said amount in the company’s capital base through Global Scansystems Technology Limited, his company, after Guinea Insurance failed to meet the regulator’s N2.5 billion minimum capital requirement.

The aggrieved shareholders have written several letters to the National Insurance Commission, the insurance regulator, and the Securities and Exchange Commission, the apex capital market regulator, informing them of what they described as the reincarnation of the 2008/2009 banking sector crisis – when some bank’s managing directors were reported to have depleted shareholders’ funds.

National President, Constance Shareholders’ Association of Nigeria, Alhaji Shehu Mikail, told The Point that he was surprised that the regulators failed to respond to his letters as they seemed to have taken the allegations with levity.

He particularly alleged that the chairman did not inject the N500 million into the insurance company as announced at the previous AGM but used his Global Scansystem firm to deceive the investors.

“I attended the last AGM in Uyo to ask the chairman to account for the fund but the chairman didn’t attend the meeting as usual. This is the fourth investors’ meeting he has failed to attend in three years. The unfortunate thing is that other board members are like puppets because they couldn’t account for the fund nor serve as checks for him,” he alleged.

Contrary to the claims of the management of the insurance firm that it is committed to protecting its shareholders from events that hinder the sustainable achievement of financial performance objectives, a top source in the company argued that the board had depleted the shareholders fund and was presently scheming to refund.

“I don’t think the chairman is transparent enough in his operations. Also, the board is planning to raise funds through rights issue but the intention is to settle claims and such a move contradicts corporate governance. NAICOM met with us last week and asked him to leave in a few months. The crisis is over now,” he told The Point.

‘THE N500 MILLION WAS A GREEK GIFT’

National coordinator, Pragmatic Shareholders Association of Nigeria, Bisi Bakare is also bitter about the missing fund and the performance of the board of directors led by Offor. According to her, the missing fund would never be found because it was a Greek gift that Offor injected to push up the capital base of the company and collected it back with the other hand.

“As far as I am concerned, he does not add any value to the company unlike the MD. He has not attended the AGM in the last three years and that is an indication that he is either avoiding criticisms or he has some other important things to do aside from the future of the company. I expect NAICOM to investigate and do the needful or probably emulate the Central Bank of Nigeria and regulate the tenure of chairmen in insurance firms,” she told The Point.

Chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, frowned at the motive behind the fund raising. According to him, raising fund through rights issue to settle claims is unacceptable to shareholders because it is not a discerning decision.

“The capital market is not a place to raise funds for now because it is down. The board should look for big investors and convince them to inject funds. No serious organisation should raise fund to settle claims. I expect the company to use the fund to develop its infrastructure, like opening branches in Kano and Aba,” he said.

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