Ikeja Hotel: When regulatory actions saved minority shareholders
by Iheanyi Nwachukwu
May 24, 2018 | 12:00 am| | | Start Conversation
The latest of good news on Ikeja Hotel Plc came in early this week (Monday May 21, 2018), when the Nigerian Stock Exchange (NSE) lifted the suspension of trading in its shares.
The lifting of the suspension of trading in the shares of the company followed approval by the Quotations Committee of the National Council of The Exchange on Friday May 11, 2018, according to a circular signed by Godstime Iwenekhai, Head, Listings Regulation Department, NSE.
The Securities and Exchange Commission had barely one year ago dissolved the Board of Ikeja Hotels Plc due to internal crisis which involved some majority shareholders of the hotel.
The SEC decision was a necessary proactive measure to dissuade then warring parties from taking certain actions that would have affected minority shareholders and other investors.
The regulator acted in line with the powers conferred on it by the Investment and Securities Act (ISA), 2007 to protect investors and the integrity of the securities market.
The NSE had about 18 months ago (November 10, 2016) suspended trading in the shares of the company. In one trading day, stock traders exchanged 404,049 units of the companies’ shares at N1.86.
Before the new board was appointed by SEC, the company was plagued with unhealthy corporate governance practices in disregard with the Code of Corporate Governance for public companies.
The new board members of Ikeja Hotel Plc led by Anthony Idigbe, a Senior Advocate of Nigeria on Friday May 18, 2018 provided a status update to the market stakeholders at a “Facts Behind the Restructuring” on the Exchange.
The Idigbe-led board’s objectives are to protect the investors of the company; protect the integrity of the capital market; and restore the lost fortunes of the company in the shortest time possible.
The new board has the mandate to oversee the conduct of a forensic investigation into the affairs of the company (investigation into the allegations of unauthorised sale of shares and diversion of proceeds from sale of shares amongst others).
The new board assured investors in Ikeja Hotel Plc of immediate readiness to complete the forensic audit on the company and its investee companies, Capital Hotels Plc and Tourist Company of Nigeria.
Ikeja Hotel Plc principal business is the provision of hospitality services. The Company has controlling interest in Capital Hotels Plc, the owners of Sheraton Abuja Hotel. It also has significant influence in the Tourist Company of Nigeria, owners of Federal Palace Hotel & Casino by virtue of its shareholding.
The current Board of Director, which was inaugurated on the May 15, 2017, together with the management, swung into action in the following areas: concluded the audit of financial statements for the years ended 2012, 2013, 2014, 2015 and 2016; successfully convened the 40th Annual General Meeting of the company on October 25, 2017; reorganised the staff with resultant return to vibrancy and company efficiency; and reduced operating expenses by 9percent.
The new board of directors of the company has also reviewed existing/commenced drafting of new corporate governance policies; commenced active engagement with the regulators in a bid to resolve all regulatory sanctions levied against the company; actively engaged with the operators, key shareholders and staff in a bid to restoring business confidence; and appointed Meristem Capital as Financial Advisers to propel the ongoing restructuring activities.
Idigbe said they will “work with the financial advisers to unlock inherent value of Ikeja Hotel Plc; ensure adherence to best standards of regulatory compliance and Corporate Governance; restore investor confidence in the company; and return the company to its position as the leader in the Tourism and Hospitality industry in Nigeria.
Ikeja Hotel Plc has a long-standing operating agreement with global hospitality brand, Marriott International. The Top choice hotel for 7 international airline crews has 663 rooms, 8 outlets, 14 meeting rooms and 2 conference halls.
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