SEC denies probing MTN’s listing, NSE defends process

The Securities and Exchange Commission has said it is not probing MTN Nigeria Communications Plc over its listing on the Nigerian Stock Exchange.

SEC alleged that some stockbrokers were instigating false media reports.

The acting Director-General, SEC, Ms Mary Uduk, said last week that MTN sought to come to the market by way of an introduction and they wrote to SEC the previous week requesting for approval to register its existing shares.

Uduk stated that the approval had been granted, describing the approval as a further indication of the determination by SEC to work with companies interested in the capital market.

She said, “We believe that this will also encourage other service providers to come to the market.”

Ebelo said any issue surrounding MTN’s listing was between the telco and the NSE as SEC held nothing against it.

She, however, said SEC might be forced to intervene in the matter if necessary.

The NSE, in a statement on Tuesday, said it had not received any communication from SEC indicating that “it is probing the Exchange in connection with the listing of MTN Communications Nigeria Plc or any other matter.

“The Exchange’s position is, thus, that those reports are inaccurate.”

The NSE had said on Monday that its attention had been drawn to a few critical issues raised in various print and social media platforms regarding the listing of MTN Nigeria on the Premium Board of the Exchange.

It said because MTN Nigeria listed by introduction, its shares were expected to be available for trading on the day of listing, adding that no MTN shares had been offered for subscription by the company prior to listing.

According to the NSE, without any intervention, it is possible that there will be no shares available for trading on the listing date.

On the issue of the scarcity of shares claimed by some reports, the NSE said, “Indeed, currently, no rule of the Exchange compels shareholders in a listed company to tender their shares for trading.  Shareholders are at liberty to trade their shares at any time and price suitable to them.

“Thus, in order to stimulate trading in the shares of companies that list by introduction, the NSE’s practice is to urge the company to make shares available on the day of listing.  In the case of MTN Nigeria, the NSE had requested the company as part of the listing process to make shares available and the Exchange expects the company to do that.”

The bourse noted that since the listing of MTN Nigeria last Thursday, a total of 105,301,759 shares valued at N12.231tn had been traded in three days.

These trades, it said, were carried out by 10 dealing member firms in 134 cross deals/negotiated deals.

The NSE said because cross deals involved clients of the same dealing member firm on both sides of a trade, significant issues had been raised that dealing members who had not been involved in the cross deals had been unable to trade on behalf of their clients.

“The Exchange is not unconcerned about this state of affairs.  Indeed, council members of the Exchange urged brokers to discuss with their clients about possible sales of shares,” it added.

The NSE also said there appeared to be a misconception that a concession was given to MTN Nigeria on the minimum free float required for companies listed on the Exchange.

It stated that the Exchange’s rules for listing on the Premium Board required a company to have a minimum free float of 20 per cent of its issued share capital or that the value of its free float be equal to or above N40bn on the date the Exchange received the issuer’s application to list.

The NSE said, “MTN Nigeria met with the free float requirement of N40bn.  The free float of MTN at the time of listing was in excess of N90bn.

“While we believe we have addressed the concerns raised, we would like to assure our stakeholders and the general public that the Exchange will continue to uphold global best practices in its business operations and will sustain engagement with its stakeholders to continually develop regulatory frameworks that ensure our market completely reflects our values of ambition, fairness and inclusion.”

MTN said its listing by way of introduction on the NSE created a new telecoms and technology asset segment for the NSE.

According to a statement issued by the company on Tuesday, its listing on the premium board is because it met all the requirements to list on the board.

It stated that its listing meant that existing shares of MTN Group (78.8 per cent) Nigerian investors (19.4 per cent) and other investors (1.8 per cent) would be listed, adding that shareholders were free to trade their shares on the NSE if they so wish.

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