By Bisi Bamishe
The National Coordinator, Independent Shareholders Association (ISAN) of Nigeria, Mr Igbrude Moses has described as being pathetic the foreign acquisition of Nigeria’s insurance companies.
Moses, who expressed worry over the development, said the foreigners only take advantage of the nation’s bad economy, undervalued stocks and the poor exchange rate affecting the nation’s economy.
Speaking during a courtesy visit of the members of the Insurance and Pension Editors of Nigeria (IPEN) to ISAN Secretariat today
in Oregun Lagos, he said, “Our economy is so bad that most of our stocks are undervalued, our exchange rate is so poor, only a million dollar will translate to N700m, then if you have N700m, in this industry, you can buy and have a stake in insurance companies”, he lamented.
He stated that not all Direct Foreign Investment (DFI) is good for the Nigerian economy, even as he noted that some of the portfolio investors come to take advantage of the weak laws and economy.
What they do, is buy into firms and delist them from Nigeria Stock Exchange and they become private business and then hid them from the eyes of the government and the next thing, you wouldn’t hear about the companies again”, he said.
Acknowledging the fact that there are still good investors, he appealed to the insurance industry regulatory body, the National Insurance Commission (NAICOM) to allow only genuine investors into the industry, even as he urged the Commission to put in place process to check activities of the fake ones.
On recapitalisation, Moses noted that what is good for insurance industry is performance driven recapitalisation. “When firms do well, they will make money themselves”, he assured.
He stressed that there was need for NAICOM to find out how firms utilise funds already at their disposal before thinking of further injection, adding that there was no need of pumping excess money into companies.
According to him, when firms are not doing well, the regulator should give them time and monitor them.
Insisting that recent recapitalisation in the banking industry led to market crash,
Moses strongly opposed recapitalisation in insurance industry adding that recapitalisation done in the past failed to yield any meaningful returns to shareholders. “Operators took the opportunity of enriching themselves,”, he said.
Also speaking at the event, the National Secretary of ISAN, Mr Chibuzor Eke called on NAICOM to provide enabling environment for insurance business to thrive.
He equally challenged insurance firms to wake up and focus on their core business in order to attract investment. He noted that insurance business was quite challenging given the fact that operators were bent on playing with funds instead of focusing on their core business.
He lamented that in other jurisdictions, insurance firms own banks but in Nigeria, the reverse is the case. Furthermore Eze, who opined that shareholders are not gaining anything from speculative investment, disclosed that they know firms that are doing well and those that are not.
Operators, he said should stop enriching themselves instead, conside the interest of shareholders who made investment in their firms.
Earlier in his presentation, the President of IPEN, Mr Chuks Udo Okonta said the purpose of IPEN visit to ISAN was to seek a cordial media relationship with the association as well as allowed the shareholders to assess their investment in insurance industry.
He promised that IPEN, as a body of insurance and pension editors ready to reshape the two sectors through developmental journalism.
