[2008-05-09]  CAP Shareholders Query N157m Payment to Wemabod
Shareholders of Chemical & Allied Products Plc last Wednesday condemned the company's payment of N157 million to Wemabod Estate Limited on a lease that has not expired.
Speaking on behalf of his colleagues, General Secretary, Independent Shareholders Association of Nigeria (ISAN), Mr. Adebayo Adeleke, urged the company to recover the money.
The company in its annual reports and accounts stated that the money was paid for the renewal of the lease of its head office at Ikeja, Lagos.
The company's Chairman Mr. Larry Ettah, who begged for shareholders understanding said, "The renewal was done in error as the property has an expired term of 47 years. The sums would be refunded by Wemabod Estates and Jide Taiwo & Co (the CAP agent on the renewal). Of this sum, N7.2 million has already been recovered, they have also paid another N50 million and hopefully in the next few months we will recover the rest."
Speaking on the share price depreciation following rumours of assets stripping, he said the company is a growing business, adding that assets sold were those surpluses to requirement.
He added that it sold the assets because it decided to stop the production of personal and household products after recording losses for so many years.
"The personal and household products business was consistently posting losses and acting as a drag on the more profitable coating and decorative paints business.
The managing director further stated that the overall contribution of the personal and household category to the total business was very, "insignificant as the brands were fringe players in a fiercely competitive market."
"As you will recall, the board made a bold and strategic decision in the previous year to divest from the personal and household business, as it did not align with our vision of being number one in our chosen markets. I am pleased to inform you that the divestment, which was anchored by a firm of financial consultants, was conducted in an open bidding session. A total proceeds of N670 million was realised from the disposal of the business and adjoining property. The profit (net of taxes) realised was N478.3 million which form part of the dividend being recommended, the assets were such that they could not be utilised in the manufacturing of paints and had to be disposed to unlock the value in these idle assets, some of which were faced with protracted litigation for repossession from recalcitrant and delinquent rental debtors," he said.
Meanwhile, the price movement chart of the NSE displayed a total of 82 stocks that appreciated in their prices. Chevron Oil Nigeria Plc led the price gainers with N14.66 to close at N307.92 per share.
On the other hand, the prices of 23 stocks dropped. Guinness Nigeria Plc led on the price losers' chart. It recorded a loss of N3.89 to close at N129.11 per share.
Other top price losers included Okomu Oil Palm Plc (N1.51), United Bank for Africa (UBA) Plc (N1.23), &-UP Bottling Company Plc (89 kobo) and Morison Industries Plc (85 kobo).






Source: Thisday