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House makes U-turn, endorses First Inland BankâÃÃâ


January 18, 2008/Punch


The National Assembly on Wednesday made a U-turn on its earlier directive halting banks from raising more funds through initial public offering.


The Chairman, House Committee on Capital Markets, Hon. Ahmed Wadada, said in Abuja that financial institutions should only access funds through initial public offers.


Wadada, who had in recent past ordered banks to halt the rush for funds through the capital market, said that the House’s decision was only against banks seeking funds through repeated public offerings.


“What the House has done is to stop public offerings by the banks. However, those that are going to seek funds through initial public offering are not affected by this decision,” Wadada said during the investors’ forum organised by First Inland Bank.


An initial public offering is the first sale of stock by a private company to the public.


“Once a company is listed, subsequent stocks sold to the public are known as public offering.”


The House decision to stop banks from raising funds from the capital market, last week sparked anger among bankers.


The Bankers’ Committee, on Friday last week said the National Assembly had no power to stop banks or other companies from raising money through the capital market.


“Any company or bank in the capital market could raise money, so long as the regulatory requirements that guided the rights of such institutions to do so were met,” the Managing Director, Spring Bank, Dr. Suleiman Ndanusa, told The Punch.


But Wadada said the House had the powers to oversee the activities in the capital market in the interest of the nation.


He endorsed the IPO of First Inland Bank, stressing that the offer was an opportunity for Nigerians to create wealth.


“I have gone through the prospectus and I am convinced that the bank is one that Nigerians can invest in,” he said.




He reiterated the House confidence in the Nigerian capital market, stressing that the First Inland Bank’s offer was without contentions.


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