Monday, November 21, 2011
* Sanusi, Dangote, Ovia, Elumelu back call
* How Kenya got Telcom firm Safaricom to list
Pressure is mounting on the Federal Government and its agencies to compel telecom firms like giant MTN, GLO, Airtel, Etisalat and oil producing firms like Shell and Exxon Mobil, to list their shares on the Nigerian Stock Exchange, following the clamour to broaden access to their ownership, Business Day has learnt.
The telecom firms affect the life of virtually every Nigerian today. On the back of their celebration of ten years of incredible business success in the country, Nigerians are joining their fierce criticism of the massive degradation in service quality, with calls for the firms to be compelled by government to bring public searchlight on the operations of the firms by initial public offers, IPOs.
Central Bank Governor, Sanusi Lamido Sanusi, put an official face behind the calls when he spoke during the recent Nigerian economic summit in Abuja.
Said Sanusi, “but 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, 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,” he said.
The position of Sanusi is now being echoed by senior Nigerians who have built large enterprises listed on the NSE.
Leading businessman and Africa’s richest individual, Aliko Dangote, said he is in full support of calls for the firms to be listed, and accused some of using their business as a mere conduit to siphon money out of Nigeria.
He told BusinessDay, “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 the 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”, says Ovia, founder of Zenith Bank Plc, which is listed on the Nigerian Stock Exchange.
The veteran banker said “take for instance MTN which reportedly makes 60 per cent of its profit from Nigeria. Why should MTN be listed in South Africa and not be listed in Nigeria. This is totally unacceptable and it is time for the government to step in.”
Tony Elumelu Chairman of Heirs told BusinessDay, “The government should encourage the telecom firms as well as the oil producing companies to list their shares on the Nigerian Stock Exchange. One of the central causes of the turmoil around the world, is the failure to create a society where there is fair re-distribution of wealth. At least 25-40 per cent of their shares should be sold to Nigerians, to create a fair and transparent access of the people to ownership.”
On the benefits of listing, Dangote said: “It will reduce the chances of massive over- invoicing or transfer pricing, ensure that these companies pay the right level of taxes and also help to deepen the market.”
Elumelu says this is not a call for Nigerianisation of the firms and adds that listing will bring about “wealth and income re-distribution, create transparent platform for Nigerians to own shares of the companies, given that they make huge profit from operating here, deepen the Nigerian stock market and give the signal that the market here is not about banking shares.”
Emmanuel Ikhazobor, former administrator, Nigerian Stock Exchange says the public listing of these companies would make them more accountable and make it difficult for the multinationals to evade or under- estimate their taxes.
Malcolm Gilroy, executive director, Afrinvest West Africa, shares the same view but suggested that the way to achieve that is by policy incentives like tax concessions and continuous infrastructure improvement on the exchange.
Director- General of the NESG, Frank Nweke, believes that by allowing indigenes to take equity interest in these firms, they would be under obligation to protect their infrastructure, reduce current incidents of vandalisation of their assets.