Pensioner loses by buying shares in troubled firm

Musoma. When Mr Francis Sana heard that shares for the National Investments Company Limited (Nicol) were trading at the Dar es Salaam Stock Exchange (DSE) six years ago, he immediately injected his money into the assets.

During that time, he was preparing to retire from public service and all he wanted was to invest his money into a company that would help him to earn good dividends at least once in a year.

With the pomp that came with Nicol’s listing at the DSE in July 2008, he was convinced that the company offered one of the best avenues for him to put his money in and enjoy the rest of his life after retiring from his duties as a Primary School teacher.

“I bought 2,000 shares at a price of Sh300 each,” he told The Citizen, sounding confused at what he sees as dashed hopes of harvesting the fruits of his Sh600,000 investment.

And, obviously, he is not alone in that boat as the history of Nicol speaks for itself.

This is because Nicol was formed in 2001 during the late days of Tanzania’s privatisation proceeds when a group of Tanzanians orchestrated a scheme to mobilise resources from across the country as a way of helping the locals to own shares in the then state-owned entities that were about to be privatised.

The idea did pay off as by 2005 – when the privatisation of the National Microfinance Bank (NMB) started – Nicol initiators have accumulated enough resources from Tanzanians that helped the company to own a 6.6 per cent stake in the country’s most profitable commercial bank.

In July 2008, Nicol became the 11th company to trade its equities at the DSE when it listed some 69,178,134 ordinary at Sh300 each.

Against such a background, said Mr Sana, he was convinced that Nicol had come as a savour in the endeavour to ensure that Tanzanians become active participants in the ownership of the country’s economy.

“Aware of how the share business works, I finally arrived at Nicol to be the best bait for my money that was intended for investment purposes, the reason being that I should be able to reap benefits of the same after retiring,” he said.

At first, he said, it was as though the going would be easy and hopes for dividend payments were arrive.

Things changed abruptly in 2011 when the DSE announced to have delisted Nicol after the latter failed to submit financial results and sold some shares in NMB irregularly.

The announcement to that effect read as: “National Investments Company Limited (Nicol) has been delisted from DSE effectively on 6th July 2011,” DSE said.

That was after the stock market regulator had suspended Nicol in June 2011 for breach of trading rules.

DSE said at that time that Nicol was suspended for its “failure and/or refusal to submit to DSE its audited financial results for the year 2009 and the year 2010.”

That suspension was the cause for a protracted court battle within the company which was precipitated by a 2011 move by the Capital Markets and Securities Authority (CMSA) to suspend the founding executive board chairman, Mr Felix Mosha and install an interim management team under the chairmanship of Dr Gideon Kaunda.

Mr Mosha challenged the move and what followed was accusations and counter accusations from both sides. However, these development made little sense to people like Mr Sana whose dream of yielding dividends from his Sh600,000 investment into Nicol died a natural death.

Besides, he cannot even tell what is happening to his shares.

“What I have realised so far is that there was a lack of transparency in the company’s dealings in the past. My efforts to talk to company officials - with a view to see how I can sell my shares - have proved futile,” he said.

His goal was to reinvest the dividend to be earned from Nicol’s operations in other income generating activities and also in completion of construction for his house.

“The idea was that I would grow that money and build a house for rent to individuals and institutions but that is all in vain due to a decision by some people who I had trusted,” he complained.

Light at end of tunnel

But finally, Mr Sana may see light at the end of the tunnel.

In April this year, the interim board chairman, Gideon Kaunda, issued a statement to the effect that the company’s financial statements for six years since 2009 had been completed and was at the auditing level. That was after what the court ruled in favour of interim board in March 2016.

That was followed by another statement on August 25 in which the interim management was notifying the firm’s shareholders that finally, all the cases that were preventing the interim management from executing its tasks, had been completed.

The statement said that the interim management had also got full control of the Nicol’s two subsidiaries – Tanzania Meat Company Limited and Tanzania Fisheries Development Company – on 5th May and 13th June respectively.

“Consequently, the interim management is presently in a position to complete the outstanding tasks and make the requisite preparations for the Annual General Meeting (AGM) in accordance with the instructions of shareholders during their January 2013 meeting,” the statement reads.

The task ahead of the interim management, the statement said, was to conduct audits and asset evaluation for several of the company’s subsidiaries before officially embarking on the preparation of a Business Plan and the calling of an AGM.

“The next step is to carry out the audit of the financial Statements…..Upon completion of the audit, the interim management expects to convene an AGM,” the August statement reads, proposing that the AGM would be held in October (last month) but depending on the completion of the audit of the financial statements.