Players seek agreement on Afroil, Capital Oil suspension
Category: Frauds & Scandals
March 26, 2008/Guardian
Apparently unimpressed by the seeming supremacy \'war\' between the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange, over the suspension on trading of two quoted stocks Afroil Plc and Capital Oil Plc, operators and stockbrokers have urged them to harmonise their positions.
The plea came on the heals of seeming disagreement among the two operators on the suspension placed by SEC last week on the two stocks following the result of an investigation by SEC into their performance and the movement in their share prices.
After the announcement of the suspension last week, there was trading on the two stocks and when the market reopened yesterday, stockbrokers continued to trade on the stocks.
For instance, 1.233 million units of Afroil Plc valued at N28.3 million changed hands yesterday in 157 deals, while Capital Oil Plc sold 2.1 million shares worth N31.44 million in 86 deals.
However, the share price of the two stocks dropped further yesterday as Afroil Plc lost 120 kobo to close at N22.93 per share, while Capital Oil Plc lost 80 kobo per share to close at N15.31 per share.
Commenting on the development, the National Co-ordinator of the Independent Shareholders Association of Nigeria (ISAN), Chief Sunny Nwosu, urged the two regulators to sheath their swords and agree on what should be done about the two companies.
According to him, a situation whereby SEC gives an order and the stock exchange disobeys, it is not good for the market.
He said: \"They should harmonise their positions on these cases. NSE is the place where the shares are traded and SEC is the apex regulatory authority in the capital market.
\"The referee has to co-operate with the linesmen according to the rules of the game. SEC and NSE should communicate on the rules and agree.
Spokesman of NSE, Mr. Sola Oni had informed journalists last week that the stock exchange only read the development on the pages of newspapers like any other person, indicating that SEC\'s letter to that effect may not have been received by the NSE.
A stockbroker, who commented on the issue, said there must be a communication gap between the two regulators.
For instance, the Managing Director, Chart Well Capitals Limited, Mr. Tunde Oyelewon in an interview with The Guardian wondered why NSE, who is saddled with the responsibility of determining which stock should trade or suspend trading on the exchange should not be informed before suspending a particular stock.
He said: \"We are trading on it and the reason being that the stock exchange is the authorising institution that is saddled with the responsibility of ensuring that certain stocks should be traded or not. So stock exchange has to be taken along in any decision as to suspending a stock or not suspending.
\"So the fact that SEC says it has suspended the stock and the stock exchange has not fully being informed, that is actually making us to still continue to trade on those stocks until there is a kind of agreement between the two of them.\"