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NSE freezes Transcorp’s shares

By Yemi Kolapo, Obinna Chima and Daniel Ochefu

The Nigerian Stock Exchange, on Monday, placed Transnational Corporation Plc on technical suspension.

Photo file Onyuike Okereke

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The decision came on the heels of Federal Government’s reversal of the sale of Nigerian Telecommunications Plc and MTel to the company over the weekend.

An official online trading document of the NSE, on Monday, stated that the shares of the company would be placed on technical suspension until the exchange received information from the company regarding changes in its ownership.

The Minister of Communication, Mr. John Odey, had announced the decision of the government to reverse the sale of the national carrier to Transcorp.

The minister said that the decision was to ensure that due process and the rule of law prevailed at all times, adding that the government had considered the barrage of complaints that had trailed the sale of NITEL/MTel.

Odey added that the failure of Transcorp to achieve the objectives of privatisation also prompted the decision.

The document explained, “We have today (Monday) placed this stock on technical suspension. The Exchange awaits information from the company regarding changes of ownership in NITEL/MTel, as reported in

the press recently.

“All transactions on Transcorp Plc will be at the technical suspension price of N4.42 until further notice.”

Confirming this development, the Principal Manager, Corporate Affairs of the NSE, Mr. Shola Oni, said the move was to ensure that the interests of investors were well protected.

The Assistant Managing Director, Apex Securities Limited, Mr. Amanze Olisaemeka, lauded the NSE move, saying that the revocation of the sale of NITEL/MTel might lead to investors disposing the shares of the company.

This could make the price of the shares to rise abnormally, he said. “Whenever there is a technical suspension, it does not mean there will not be trading on the stocks at all. There will be trading, but only at the market price,” he explained.

However, another stockbroker who pleaded anonymity, faulted government’s reversal, saying, “Transcorp has about 250,000 investors, who are mainly Nigerians. So, if the government, in taking such a decision, makes them to lose their investments, then it is not

protecting them. This is not about the rule of law.

“I believe that a government that claims to be a listening one will reconsider the decision.”

The President, Association for the Advancement of the Rights of Nigerian Shareholders, Dr. Farouk Umar, said the reversal was not in the best interest of Nigerians.

He said if this decision was not reversed, foreign investors would be discouraged because due to distrust of the government.

“Today, they take a decision on an issue and the next day, that decision is reversed,” he said.

The National Coordinator, Independent Shareholders’ Association, Mr. Sunny Nwosu, said the reversal showed that government was not a good partner to do business with.

“We are aware that Transcorp invested 51 per cent in NITEL. So, now that they have revoked the investment, it means government will have to keep the entire 100 per cent and pay back to Transcorp whatever is due to it,” he said.

He, however, said there was no cause for alarm over the technical suspension placed on Transcorp’s shares.

“The NSE would have done this to prevent investors’ panic decisions,” he added.

Nwosu said, “It is an international way of protecting a stock, so that investors do not depress the market as a result of panic trading.”

“Transcorp is not in doubt; it is the investment of Transcorp in NITEL that has problems. The register of shareholders of Transcorp is not also in doubt; it is with the registrars,” he explained.