LAGOS – Some members of the Quotations Committee of the Nigerian Stock Exchange (NSE), on Wednesday distanced themselves from the technical suspension placed on Access Bank Plc shares earlier in September 2014.
Technical suspension refers to a former NSE operational practice, where share prices of quoted companies involved in capital raising are freezed from gaining or losing during daily equity transactions.
Investigations by the News Agency of Nigeria (NAN) showed that the members’ action followed the Securities and Exchange Commission (SEC) ongoing investigation on the technical suspension imposed on the bank’s shares.
SEC had in a statement indicated that the suspension contradicted the commission’s earlier directive that no company should be technically suspended during public offering or rights issue.
Sources close to the exchange told NAN that they were surprised that the shares were placed on suspension without the knowledge of the committee.
A source said “every approval at the NSE comes from the quotations committee” and described it as an unfortunate development.
“In the history of technical suspension, we have never put technical suspension before the company gets an approval from the exchange.”
Another committee member, who wants to be anonymous, expressed surprise on why the bank’s shares were placed on technical suspension before the Access Bank board and management receive shareholders nod to float the rights issue.
“It is an abnormal transaction that has never occurred in the history of the nation’s bourse,” he said.
He rged SEC to manage the issue with tact to safeguard the re-emergence of the investing public confidence in the Nigerian capital market.
“Investigating the exchange at this present time will not be in the interest of the market because the market is going through a critical moment,” he said.
NAN recalls that the NSE had in September 2014 placed the shares of Access Bank on technical suspension following its proposal to float a rights issue.
NAN reports that following what stakeholders termed abridge of due process, SEC recently commenced investigation on the purported technical suspension imposed on the shares of Access Bank by the exchange.
SEC in a statement recently indicated that the suspension contradicted its earlier directive that no company should be technically suspended during such transactions.
“The commission wishes to state that it had in September 2009 directed the NSE to discontinue the practice of placing securities of listed company on technical suspension during capital raising exercise as it is not a best practice,” it said.
The commission also wondered why “no such suspension was placed on the shares of other listed companies who undertook capital raising recently.”
SEC, which declined to name the team probing the NSE, also said that the NSE had lifted the technical suspension in response to the commission’s order of Sept. 23.
“In furtherance of this discontinuance of technical suspension of trading in listed securities in the Nigerian capital market that the Commission directed the NSE on September 23, 2014 to immediately lift the technical suspension on the bank’s shares,” it said.
The commission also reiterated that no technical suspension should be placed on the securities of any company involved in capital raising on the Nigerian bourse in order to avoid unfair market practice. (NAN)