A critical power struggle is unfolding at NASD PLC as VFD Group PLC, a major stakeholder, demands a strategic revamp of the alternative market platform ahead of its 11th Annual General Meeting (AGM). The proprietary investment firm has voiced dissatisfaction with NASD’s financial performance, governance structure, and its inability to meet shareholder expectations.
VFD Group, a significant board member at NASD, has expressed concern over the company’s consistent losses and declining revenue. NASD has recorded losses in eight of its eleven years, with notable losses of N79 million and N69 million in 2022 and 2023, respectively. Revenue has also fallen from N660 million five years ago to N557 million in 2023, with trading fees and commissions contributing N295 million, primarily from two companies: CSCS Plc and VFD Group Plc.
VFD Group advocates for NASD to modernize and cater to younger, tech-savvy investors. The firm believes NASD must adapt to alternative investment trends that attract this demographic but criticizes the current business model as outdated and unproductive. Additionally, VFD highlighted governance inconsistencies, particularly concerning the re-election of directors. The firm argues that NASD’s practice of re-electing newer board members while retaining long-serving ones contradicts Securities and Exchange Commission (SEC) guidelines and could undermine investor confidence.
Despite these concerns, VFD Group has pledged support for all resolutions proposed at the AGM, showing commitment to collaborate with NASD’s board and management to boost shareholder value. However, VFD insists that significant strategic changes are necessary for NASD’s future success.
In response, NASD Managing Director Eguarekhide Longe addressed VFD’s concerns in an internal communication, portraying them as a power struggle rather than a call for genuine reform. Longe defended NASD’s governance and transparency, emphasizing the complexities of operating a market infrastructure platform that does not depend on compulsory listing fees, unlike its peers in the debt capital market. He acknowledged the challenges of transforming a constrained market but assured that NASD remains open to growth ideas, including those from VFD.
Investor frustration is mounting as NASD’s financial issues and governance shortcomings come under scrutiny. With the AGM approaching, the company faces mounting pressure to address these challenges. As NASD contends with increasing competition from NGX and FMDQ, adapting swiftly to the evolving financial landscape will be crucial for its survival and growth. The upcoming AGM will be a pivotal moment in determining whether NASD can navigate these challenges and secure its future.
