We are under EFCC investigation on NSE listing – MTN


Nigeria’s largest mobile carrier, MTN Nigeria Communications Plc, has finally spoken on the alleged raid of its headquarters by the operatives of the Economic and Financial Crimes Commission, EFCC.

Late Friday night, we reported that MTN’s Lagos headquarters was raided by operatives of the EFCC over allegations of share price manipulation in it listing on the Nigerian Stock Exchange, NSE.

People with the knowledge of the matter told PageOne’s business correspondent that officials of the EFCC executed a lockdown mode at the headquarters, seizing documents from concerned offices at the headquarters.

Earlier today, the company issued an official statement via its Secretary, Uto Ukpanah., nearly 48 hours after the raid that the EFCC requested for documents regarding its listing on the NSE. He however said:

“We wish to reiterate that we received all regulatory approvals required to list on the Nigerian Stock Exchange as publicly confirmed by the NSE Securities and Exchange Commission.”

It would be recalled that MTN Nigeria listed its shares worth about N1.8 trillion on the NSE at N90 per share via a listing by introduction where its existing shareholders can basically sell their shares to members of the public.

However, the listing had generated controversies, allegations of share price manipulation by various segments of the investing public.

Since the allegations of share price manipulations came to light, MTN has issued a statement clarifying it’s position on the basis of listing by introduction. MTN was required to float 20% of its shares but under and introductory listing, there are no commitment from either the company’s directors/existing shareholders to sell any share. Shareholders who wish to sell will basically decide what amount or quantity they are disposed to selling to the public.

The crux of the controversy was a meteoritic rise in the share price from an introduction price of N90 per share to over N140 per share within five days of the listing despite unavailability of shares to a massive demand for the shares.

Traders and parties who claimed to have completed a handful of transactions confirmed they were mostly cross trades, an arrangement where a shareholder is linked with a potential buyer directly. The stock is then exchange for cash at the agreed price which is often close to 10-15% more than the current price.

The sharp rise the stock price has spooked many traders, retail investors and even institutional investors who predicted a sharp fall and that a bubble must have been created with the sharp rise in the stock price.

As at Friday, before the closing of trading session, shares of MTN slightly to minimum price of N130 per share.

Independent equity research organization, Stockman Nigeria said via a Twitter post that:

“Meanwhile, MTNN is just exploiting the loopholes and weakness in enforcement of listing & Post-listing Rules.

“If not, how come a PREMIUM Listing took place without adequate FLOAT??.”

However, the company has not at least on prima facie basis done anything wrong.

“I want reiterate that @MTNNG has not erred so far the REGULATORS gave the approval.”

But in the end, “MTNN may suffer Investors loyalty at the end,” Stockman said in the tweet.

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