The Securities and Exchange Commission
(SEC) has commenced investigation of companies that floated private
placements not yet quoted on the Nigerian Stock Exchange (NSE), sources
at the commission confirmed on Tuesday.
SEC moves followed the discomfort which
the unfortunate development is causing the investing public and the huge
funds trapped in the stagnated investment.
“Specifically the management has written
the companies involved, especially those that indicated intention to
list on the nation bourse in their prospectus during the funds raising,”
the source said.
According to the source, the commission,
under the new management, has declared a zero tolerance level to
practices that would affect investors’ confidence.
Th source said that the commission was
determined to stamp out misleading information or promises by issuers
and marketers in respect of listing.
Boniface Okezie, President, Progressive Shareholders Association of Nigeria (PSAN), commended SEC moves to sanities the market.
He urged companies that raised private placement during the boom period in the market to walk the promises of seeking quotation.
Okezie said that there were myriads of
primary market activities without complete regulatory oversights on the
initial funds raised and the state of the seed capital.
Available information at the Nigerian
Stock Exchange (NSE) showed that more than 300 private placements were
marketed during the boom period with most of them being over-subscribed.
The private placement in the period
under review was one the best options and most successful medium of
raising long term capital as against the highly regulated Initial Public
Offering (IPO) of securities.
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