MTN circumventing company’s listing rules, experts argue

Stakeholders have accused MTN of intentionally not making available the mandatory 20 per cent free float, blaming the Nigerian Stock Exchange for approving MTN’s listing without the mandatory free float.

The experts who spoke in Lagos on Monday argued that MTN Nigeria shares would continue to skyrocket due to their scarcity at the detriment of retail shareholders.

According to NSE’s rules, free float for companies listed under NSE Premium Board is 20 per cent.

By this, free float or public float refers to the shares of a company that can be publicly traded and are not restricted. In other words, the term is used to describe the number of shares available to the public for trading in the secondary market.

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Ambrose Omordion, the Chief Operating Officer, Invest Data Ltd., expressed disappointment at the development, saying that the listing was at the expense of retail shareholders.

He claimed that the shareholding structure of MTN Nigeria showed that the 23.92 per cent, said to be floating, were held by institutional and individual high net worth investors.

According to him, the investors are using the exchange to enrich themselves at the expense of retail investors who want to be part owners of the company.

“The 20 per cent minimum free float is one of the listing requirement, but it seems to be post a listing requirement since companies are listed and given time to meet the minimum free float.

He said that the Securities and Exchange Commission (SEC), NSE and brokers would benefit from the situation, leaving potential local shareholders to buy the shares at a high rate.

The Founder of Independent Shareholders Association of Nigeria (ISAN), Mr. Sunny Nwosu, described the listing as dissatisfactory.

“Our conclusion as shareholders is that they have come to play us a game which is not far from a fraudulent game; the nominal value of MTN shares is not certain.n Up until now, no prospective shareholder can tell you this is what MTN Nigeria stands for,” Nwosu said.

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He said that the exchange set a bad precedence in the market by allowing some companies to list without meeting the free float requirement.

The ISAN Publicity Secretary, Mr Moses Igbrude, described the listing as a welcome development, but urged the management of exchange to ensure compliance with the minimum free float by all listed companies in the market.

Recall that MTN Nigeria on May 16, listed a total of 20.35 billion shares at N90 per share. The stock at the first trading day rose by nine naira or 10 per cent to close at N99 per share.

It increased on the second trading day, on May 17, by 10 per cent to close at N108.90 per share.

The shareholding structure of MTN Nigeria shows that the controlling entity is MTN International Ltd., which owns 15,485,544,050, representing 76.08 per cent of the shares.

On the other hand, the non-controlling entities in the telecommunications company include: Stanbic IBTC Asset Management Ltd. with 1,962,349, 050 (9.64 per cent), Chief Victor Odili, 806,886,900 (3.96 per cent) and Mobile Telephone Network N.I.C.B.V with 559,720,150 (2.75 per cent).

Others are: Government Employees Pension Fund (represented by Public Investment Corporation SOC Ltd., 355,281,650 units (1.75 per cent) and Mr Pascal Dozie with 340,409,900 units (1.67 per cent).

Other non-controlling entities are: Mr Sani Mohammed Bello, 265,092,150 (1.30 per cent); Mr Babatunde Folawiyo, 218,815,100 (1.08 per cent); Mr Gbenga Oyebode with 181,776,250 units (0.89 per cent).

The others are Malam Ahmed Dasuki with 177,717,850 units (0.87 per cent) and Mr Karl Toriola with 920,000 units (0.005 per cent).