The board of Cutix Plc has initiated proceedings to remove Dr. Chidozie Nsoedo as a Director, citing a significant decrease in the shareholding block he represents.
Initially, Dr. Nsoedo’s group, comprising Mr. Sam Nsoedo and R.C. Onyeje & Co, held 12.42% of the company’s shares, meeting the 10% threshold required for Board representation.
However, changes in R.C. Onyeje & Co’s share distribution to late Chief Rufus Onyeje’s beneficiaries reduced their aggregate shareholding to 7.22%, falling below the required threshold.
Reasons for Removal:
Decreased Shareholding Dr. Nsoedo’s representatives’ shareholding dropped below the required 10% threshold.
Failure to Cure Defect: Dr. Nsoedo refused to address the issue despite the Board’s guidance.
Ineligibility: Dr. Nsoedo no longer meets the eligibility criteria for Board representation under Section 83(1) of the Articles of Association.
The Board informed Dr. Nsoedo of the implications and offered him time to rectify the issue, but he declined, claiming entitlement to remain on the Board for three more years.
Consequently, the Board resolved to remove him as a Director through an Extraordinary General Meeting (EGM) scheduled for November 27, 2024.
However, on the flip side, Dr. Chidozie Nsoedo Sets Record Straight on
Cutix Plc EGM Controversy – Refutes Removal Claims
POINT 1.
As the Director at the centre of the EGM resolution, it is only equitable, just and fair
that I be given the opportunity to present my side of the story. As they say, there
are always 2 sides to every story and there is the truth backed up with verifiable
facts and concrete evidence. Please look at the verifiable facts and concrete evidence
below and draw your own conclusion as to what the truth is.
POINT 2.
Having served faithfully on the Board of Cutix PLC with utmost integrity since 2018, I
was duly and unanimously re-elected by the shareholders of Cutix PLC at the 41st
Annual General Meeting of Cutix PLC held on the 30th of August 2024 to serve a 3-
year term. In accordance with the provisions of the Memorandum and Articles
of Association of Cutix PLC:
For the avoidance of doubt, Article 96 (2) is quoted below, and it clearly states:
Article 96 (2) “That a Director duly elected at the Annual General Meeting of the
company is entitled to serve a 3 year term before seeking re-election”.
POINT 3
The full text of Article 83(1), for the avoidance of doubt, has been quoted below.
83. (1) No Director or Alternate Director shall be required to hold any
qualification share, but any shareholder or shareholders holding an aggregate of
at least 10% of the shares of the Company shall be entitled to be represented
by one director.
POINT 4
As a Shareholder of Cutix PLC, you would see that there is absolutely nowhere in
Article 83 (1) that it states that the depletion of a 10% shareholding representation
by any quantity automatically disqualifies or automatically calls for the removal of a
Director before the end of his or her 3-year tenure. This would not even be a
reasonable provision.
POINT 5
Article 83 (1) also clearly states that: “No Director or Alternate Director shall be
required to hold any share qualification” this means that Directors can be on the
Board even if they have no shareholding representation. The 10% shareholding has
to do with the entitlement to be represented on the Board; it does not categorically
state that any depletion in shareholding representation automatically translates to
the disqualification or removal of a Director before the end of the Director’s tenure.
POINT 6.
After probate and the execution of the Will of Chief R.C Onyeje the Founder of RC
Onyeje & Company (Nig) Ltd. The shares of RC Onyeje & Company (Nig.) Ltd were
split among his relatives who are beneficiaries of his Will. Due to this split, Dr.
Chidozie Nsoedo’s representative shareholding reduced from approximately 12% to
approximately 7%.
POINT 7
There are other Directors with less than 4% shareholding representation on the Cutix
PLC Board. In accordance with the provisions of the Memorandum and Articles
of Association of Cutix PLC, a shareholding representation of up to 4% can also
give you a seat on the Board. I have approximately 7% which means that I
represent a Substantial interest shareholder (i.e. above 5%). The ethical question
is: why should I be removed from the Board when I am fully qualified to be on
the Board and was duly and unanimously elected by Shareholders at an Annual
General Meeting held on the 30th of August 2024 ?
For the avoidance of doubt, Article 83 (2) is quoted below, and it clearly states:
Article 83 (2) That a shareholder or group of shareholders with up to 4% of the
paid up share capital be entitled to nominate a person who need not be a
shareholder but with valuable skills, experience and contacts as a Director.
POINT 8
Just looking at the order of the agenda items for the EGM, you can tell that
something fishy is going on:
1. “To remove Dr. Chidozie Nsoedo as a Director of Cutix Plc (the Company)
following the depletion of the required minimum aggregate of 10% shares of the
Company that qualified him as a Director of Cutix Plc to represent Mr. Samuel
Nsoedo and R.C Onyeje & Co on the Board under Section 83(1) of the Articles of
Association of the Company.
2. “To amend the Articles of Association to include a provision that the Board of
Directors may declare that a Director representing a Shareholder or Shareholders
with shares or block of shares not less than 10% on the Board shall cease to be a
member of the Board if the shares fall below 10% of the shares of the Company as
required under Section 83 (1) of the Articles of Association of the Company and
declare his office vacant.
1. The first key question Shareholders should be asking is: Why should a
Director be removed on a provision that does not currently exist or that is not
clearly stipulated in the Memorandum and Articles of Association of Cutix PLC.
That in itself is a violation of the Memorandum and Articles of Association of
Cutix PLC.
2. The second key question Shareholders should be asking is: Why should a
Director who was duly and unanimously elected at a Statutory Annual General
Meeting which was held on the 30th of August 2024 be suddenly removed on
the same day in which there is a proposal to change the Company’s
Memorandum and Articles of Association? That in itself is unethical and is also a
violation of the Shareholders’ resolution at the 41st Annual General Meeting of
the Company.
3. Thirdly, the proposed amendment to the Company’s Memorandum and
Articles of Association makes no sense because it contradicts itself. In the
Company’s Memorandum and Articles of Association: Article 96 (2) clearly
states:
Article 96 (2) “That a Director duly elected at the Annual General Meeting of the
company is entitled to serve a 3 year term before seeking re-election”.
How then would it make sense to automatically disqualify a serving Director or
automatically call for the removal of a serving Director just because his or her
share representation has reduced from 10% to maybe 9%, 8%, 7%, 6%, 5%, 4%,
3%, 2% or 1% after being duly elected by Shareholders to serve for a 3-year
term, this would make a mess and mockery of the Company’s Memorandum
and Articles of Association because it is an illogical contradiction.
Based on Article 83 (1), Article 83 (2) and Article 96 (2) of the Memorandum and
Articles of Association of Cutix PLC, there is absolutely no doubt that this is an
unfair, unjust, and unethical attempt to remove me as a Director of Cutix PLC,
under the pretext of shareholding depletion and also an attempt to mess-up
and make a mockery of the Company’s Memorandum and Articles of
Association (MERMART) for this purpose.
Highly Esteemed Shareholders of Cutix PLC, please take note that I am a strong advocate for good corporate governance, professional ethics and integrity.
Therefore, it made no sense whatsoever for me to continue to work in an environment in which there is a lack of very basic professional ethics and integrity.
I therefore resigned on the 14th of November 2024 as a Director of Cutix PLC. In the future, I may re-consider joining the Board of Cutix PLC again, but that will be dependent on so many factors being put in place.
