Bill coming to compel Telecoms to list shares

Bill coming to compel Telecoms to list shares

 

Wednesday, 23 November 2011
 

Committees of both the Senate and House of Representatives, are working on two parallel tracks which will result in the presentation of a bill to compel large commercial entities like MTN, Globacom, Airtel, Etisalat and the oil firms, to list their shares on the Nigerian Stock Exchange (NSE) Business Day learnt yesterday.
 

In response to the stories published in the last two days by Business Day, legislators from both houses of the National Assembly, told our reporters that stakeholder consultations were being held, with the intention of carrying key sectors along.

A key part of the initiative, is to compel the telecommunication companies operating in Nigeria , to transit from being private entities, to listing their shares on the exchange.
 

In addition, the bill is expected to redefine the deliverables of the privatisation programme of government, and say that privatisation of a public enterprise cannot be complete, until such an entity is listed on the stock exchange in Nigeria.
 

Herman Hembe, chairman of the 29-member Capital Markets Committee of the House of Representatives, said “We are not just watching the unfolding debate. We are also actively seeking to shape it. Our primary goal is to come up with a bill which will seek to compel these companies, especially the telecommunication companies, to list their shares. I do not see why this cannot be done by the second 1quarter of next year.”
 

One senator involved in the initiative, told Business Day last night, “We are not interested in their shares but we will insist that best practice is best practice, whether in South Africa or Nigeria . It is only appropriate to get these firms to begin a transparent and fair process of broadening their shareholding and sharing the dividends of the huge success they continue to make in this market. It is good for the companies. It is good for Nigeria .”
 

Central Bank of Nigeria (CBN) governor, Sanusi Lamido Sanusi, has led the campaign in government to compel the said entities to list their shares.
 

Said Sanusi, :”The question is, why can’t we have a law that will compel companies like MTN, Globacom and Shell to list on the Nigerian Stock Exchange? There is absolutely no reason. They don’t need to own 10 per cent of their companies and they don’t need to be held closely by a narrow range of Nigerians. At a time, countries like France , the United Kingdom and America had legislations that ensured that any company that does business in those countries for a period of time, is listed in their stock exchange.
 

“If in Nigeria , we say any company doing business here for more than 18 months has to list or get out, they will comply. We have to get legislation for these companies to list.”
 

Studies already done by leading asset investment experts, suggest that getting the leading telecommunication firms to list on the Nigerian Stock Exchange, could grow market capitalisation by N6.13 trillion.
 

Leading businessman and Africa ’s richest individual, Aliko Dangote, says, “Government should just give them the marching order to list and I do not see how this cannot be achieved in six months.
 

“Let them not give us the crap that they have issues with the market or with a government policy which compels them to list. We went to South Africa to take over a company there and we are complying with the Black Empowerment Policy, put in place by the government there. MTN cannot be making $2 billion in profit yearly and seeking to remain a private company.”
 

Leading bankers Jim Ovia and Tony Elumelu, also support the call.
 

Ovia fired one of the biggest public salvos at a recent investors’ forum organised in Abuja , by the Securities and Exchange Commission (SEC) when he said it was no longer acceptable for the telecom firms to remain private.
 

“There is a strong case being made for the listing of the shares of the telecom firms”, said Ovia, founder of Zenith Bank Plc, which is listed on the stock exchange.

 

 

Source: BusinessDay


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