EFCC raids MTN office, sniffing an alleged share manipulation scandal, NSEASI faces the blow, plunges by 2.2%   

27 May 2019 : MTN Nigeria is in the news again, but not for the right reasons (They sure seem to love the limelight). 

On May 16, 2019, MTN listed on the Nigerian Stock exchange through introduction. The listing took the market by storm and NSEASI went into a full blown rally.MTNN was soaring, which made the ASI skyrocket to stratosphere. But shortly after that, last week on Friday the Nigerian Operatives of the Economic and Financial Crimes Commission (EFCC) sniffed some scandal behind the MTNN listing and thereby raided their head office in Falomo, Lagos. Top management of the company were questioned and were asked for documents pertaining to the share listing.

Both EFCC and MTN were unavailable for comment, but a source familiar with the deal, said the visit of the team from the anti-graft agency was a consequence of the barrage of complaints from “several unnamed brokers that the shares of MTN are not available for the public to buy despite the recent listing that was greeted by huge excitement.” Theoretically, since the lsiting is through introduction, there will be no additional public sale of shares, which means MTNN shareholders are free to trade their shares on the NSE, but this hasn’t happened. Investors and stakeholders are getting increasingly worried about the free float accommodation MTNN was given by capital market regulators to pave the way for its listing. They are complaining that the price of MTN shares would be sold at high premium and those waiting to buy the shares through an Initial Public Offering (IPO), would have to buy them at very high cost, whenever the telecoms company decides to float the IPO. Investors feel that the shares of MTN Nigeria have been manipulated to skyrocket the price of the stock before any share offering through an IPO

Moreover, According to a stockbroker, the continuous astronomical rise in MTNN seemed quite shady and was a clear indication that some underhand deals must be in the offing. Moreover this rise, increased the risk of the top players in the bourse getting displaced from their vantage positions as market leaders.

However despite the alleged manipulation of the MTN shares, the telecoms industry regulator, the Nigerian Communications Commission (NCC), has declared confidence in the shares listing. The Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, while speaking at the valedictory service organised for the Minister of Communications, Adebayo Shittu in Abuja recently, said “With MTN shares available in the capital market, Nigerians will buy shares and by purchasing the shares of MTN, they will be financially empowered and be socially transformed. We consider this a very important milestone in translating the function of the NCC into reality, as enshrined in the Nigerian Communications Act 2003,” Danbatta said.

Mr. Funso Aina, the Senior Manager, External Relations at MTN Nigeria,  said “We will issue a statement very soon”.

Following the news of the raid, NSEASI plunges by 2.2% at the start of the trading week. 

Reporting for EasyKobo on Monday , 27 May 2019 in Lagos, Nigeria

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