Nigerian capital market authorities presented contradictory clarifications on the regulatory impasse that saw the lifting of technical suspension on Oando Plc and reversal of the same within a few hours during trading at the Nigerian Stock Exchange (NSE) on Wednesday.
In late-night statements on Wednesday, both the Nigerian Stock Exchange and Securities and Exchange Commission (SEC) were silent on the cause of the impasse and the huge loss of value to investors and the infraction on the global integrity of the Nigerian market.
The NSE attributed the impasse to directives from the apex capital market regulator, SEC. SEC subsequently claimed it acted in the overall interest of the market without specifying why it issued counter-directives on the same issue.
The Exchange noted that it had by a letter dated April 9, 2018 from SEC received a directive to lift the technical suspension placed on the trading of Oando’s shares.
“In compliance with the Commission’s directive, the Exchange by a letter dated 10 April 2018, informed the Commission that it will lift the technical suspension placed on the shares of Oando effective 11 April 2018. This action was duly effected and trading commenced without any impediment to price movement in the morning of 11 April 2018.
“Subsequent to the lifting of the technical suspension, on 11 April 2018, the Exchange received another communication from the Commission to maintain the status quo prior to the Commission’s letter of 9 April 2018, i.e., the technical suspension of trading in Oando’s shares. In order to ensure compliance with the Commission’s further communication notwithstanding the fact that The Exchange’s systems cannot implement a technical suspension intraday, the Exchange suspended trading in Oando’s shares. The Exchange regrets any inconvenience that may have arisen due to the foregoing,” the Exchange stated.
The NSE however stated that it had consulted with the SEC and price-moving trading will commence on Oando’s shares today (Thursday).
“In the overall interest of investors in Nigeria’s capital markets, and following consultation with the Commission please be advised that at the start of trading tomorrow, 12 April 2018, trading in Oando’s shares will resume without any impediment in price movement consistent with the NSE’s market structure,” the NSE stated.
SEC explained that it decided to lift technical suspension on Oando in the overall interest of the investing public.
SEC noted that shares of Oando Plc were placed on technical suspension in October 2017 upon the announcement of forensic audit which aimed to protect investors as a short term measure.
According to the Commission, suspensions are typically intended for a short period to ensure market stability and thereafter lifted to allow market dictates. However, the suspension of the shares of Oando plc was prolonged due to several litigations by Oando and other shareholders contesting the propriety of the forensic audit and technical suspension.
“All litigations have now been withdrawn, the independent forensic audit by Deloitte is ongoing and the primary result is expected. Accordingly, the SEC directed the NSE to lift the technical suspension and allow market determination of the share price. The Commission acted in the interest of shareholders and would continue to protect the interest of all the investors and other shareholders in the capital market,” SEC stated.
The Commission assured that it would continue to update relevant stakeholders on the outcome of the forensic audit.
RipplesNigeria… without borders, without fears
Latest posts by Ripples Nigeria (see all)
- DPR seals 5 fillings stations in Edo - July 23, 2019
- Obaseki and the political chess game in Edo State - July 23, 2019
- ICYMI: Will El-Zakzaky ever know freedom before Buhari leaves office? - July 23, 2019