Friday, 17 October 2014

Access Bank’s Share Freeze Under Investigation


1-1access-bank-building-300-1
VENTURES AFRICA – Nigeria’s securities market regulator, the Securities and Exchange Commission (SEC), has disclosed that it is investigating last month’s share freeze of top tier lender Access Bank ahead of its planned N68 billion ($415 million) rights issue.
Access Bank had in September applied to the Nigerian Stock Exchange (NSE) to suspend its shares for a week arguing that information on its capital raising was not publicly available and that it wanted to avoid speculation in its shares. But the SEC had five years ago issued a directive that no listed company should have its share price frozen for reasons of fund raising, fellow lenders Diamond Bank and Unity Bank, who recently held rights issue, had their shares trading while they were raising funds.Although the SEC said in a statement that it was aware of the prize freeze on Access shares, it added that it is “investigating the circumstances surrounding the action of the NSE in imposing the technical suspension on Access Bank Plc shares as no such suspension was placed on the shares of other listed companies who undertook capital raising recently”. The share freeze, which the SEC says it directed the NSE to lift on September 23, has been described by market analysts as a process that was exploited by market participants in the past and should not be allowed to make its way back into the capital market. They also said say it runs against the rights of shareholders to subscribe for their rights issue and sell their stocks (existing and rights) as they deem fit.
Access Bank earlier this week said it had filed for regulatory approval to raise fresh capital after its shareholders backed the plan. Reuters reports that shares in the bank closed at N8.35 each on Thursday, more than 11 percent below the pre-suspension price.

No comments:

Post a Comment