Publicly quoted companies were banned from distributing corporate gift items at their annual general meetings to avoid profits that should be shared to investors being spent on such gifts,The commission said in a statement by its spokesperson, Efe Ebelo, that the clarification was necessary as public companies have been spending a significant amount of their profits on such gift items at AGMs and extraordinary general meetings.
Rule 602 states that “public companies shall not distribute gifts to shareholders, observers and any other person at Annual General Meetings/Extra-Ordinary General Meetings. Last year, SEC amended its Rules and Regulations to stop listed companies from distributing gift items at their AGMs and EGMs. “Few of the companies are making reasonable profits, and even fewer can afford to pay dividends to their investors,” the commission noted.
Right move by SECNigeria. Returns to shareholders should be via dividends or(and) share buybacks.