Shareholders may sue Cadbury over capital reduction

Some shareholders on Friday threatened to sue Cadbury Nigeria Plc over the company’s plan to embark on share capital reduction.

The shareholders, under the aegis of the Progressive Shareholders Association of Nigeria (PSAN), made the threat in an interview with the News Agency of Nigeria in Lagos.

The minority shareholders said that the resolutions passed at the company’s extraordinary general meeting (EGM) on December 19, 2013 breached corporate governance and remain an antithesis to the growth of the nation’s capital market.

Mr Boniface Okezie, PSAN President, said that the minority shareholders would only accept capital reduction based on the prevailing market price of Cadbury shares.

According to him, he declined to vote because the offer price of N9.50, as against the N58.27 market price of Cadbury was a serious disincentive to both investors’ and the market.

He said that the planned capital reduction should be done in the right way, without shortchanging minority shareholders.

Okezie said that the minority shareholders had contributed immensely toward the rejuvenation of the company in its locust days.

“We have endured without dividend for years when the company had problems and should not be maltreated.

“The company should not take retail investors for a ride as the majority investors have no right to vote at the meeting.” he said.

Okezie said also that the excess funds could be used for products expansion aimed at increasing the company’s bottom line.