Asset management and securities trading company, United Capital Plc faces an operational risk following a lawsuit that could lead to a financial loss of about N260 million.
These lawsuits are for the financial period of 2022, however, are ongoing litigations. It was learnt that the claims from the cases are more than the N152 million litigation claims against United Capital in 2021.
“The Group is involved in cases with claims amounting to N260m (2021: N152m). Directors are of the opinion that the possibility of an outflow of resources embodying economic benefit is remote and as such no provision is required,” United Capital said in the firm’s financial statement obtained on Tuesday.
Aside from the lawsuits the company is facing, United Capital was also fined by the capital market regulator, the Securities and Exchange Commission.
The Securities and Exchange Commission fined United Capital N12.18 million for failing to submit the post listing bond issue on behalf of its client with the capital market regulator as at when due.
It was gathered that the fine increased from the N3 million United Capital received in 2021, as the board of the firm, led by Chika Mordi, failed to tame United Capital’s operational violations, which is affecting the firm’s earnings.
In 2022, United Capital suffered a -14.26 per cent decline in profit after tax, which represents a drop of N1.60 billion in net profit, from which dividends are paid to company shareholders.
United Capital’s net profit fell to N9.65 billion at the end of December 2022, failing to surpass the N11.25 billion the company reported the year before.
The financial services firm posted N26.89 billion gross earnings last year, in contrast to the N18.06 billion generated in 2021.
Amid rising litigation claims and regulatory fine against United Capital, coupled with declining net profit, the company was unable to increase dividend payout to its shareholders for the financial period of 2022.
The board offered N1.50 kobo per share as dividend payout to shareholders for the operating period of last year, which is the same amount it paid to them in 2021.
