Rights Issue: Stockbroker Wants Forensic Audit of Lafarge Africa

June 27, 2019
lafarge africa shareholders

By Dipo Olowookere

The newly inaugurated board of the Securities and Exchange Commission (SEC) has been urged to quickly conduct a forensic audit on Lafarge Africa Plc and other listed companies on the Nigerian Stock Exchange (NSE).

This call was made by a stockbroker in the nation’s capital market, who incidentally is the Managing Director of APT Securities and Funds Limited, Mr Garba Kurfi.

On June 24, 2019, the federal government inaugurated the board of SEC with a directive to make the stability of the capital market a cardinal objective.

The nine-member board, under the chairmanship of Mr Olufemi Lijadu, was inaugurated by the Permanent Secretary in the Ministry of Finance, Mahmoud Isa-Dutse, who charged the members to bring their wealth of experience to bear in restoring investor confidence in the capital market.

The inauguration of the new board came after four years that the last board headed by a former Governor of Anambra State, Peter Obi, was dissolved.

In a report by the Voice of Nigeria (VON), Mr Kurfi was quoted as urging the board to ‘extend forensic audit to public companies whose activities were doubtful such as Lafarge Africa that floated rights issue in 2017 at N42 and another rights issue in 2018 at N12 per share.’

While appealing to the newly constituted board to ensure adherence to 10-year capital market master plan, he said it should also put things right by settling all outstanding issues.

Also giving a task to the board, Mr Sola Oni, a chartered stockbroker, said the board should address the issue of corporate governance gap in the commission by appointing a substantive director-general.

“This is necessary to remove the stigma of corporate governance gap from the commission,” he said, adding that the commission should not continue to operate with an acting director-general and acting commissioners contrary to ethics of corporate governance.

According to him, the new board should strengthen SEC’s advocacy role in the need for government’s constant engagement with stockbrokers before strategic decisions on the financial market operations would be made.

“The capital market should not be treated as a second class platform in the financial market,” Mr Oni said.

He said that there was the need for the harmonization of activities in the market to reduce the financial burden being imposed on stockbrokers in terms of training.

On his part, the Chief Operating Officer of InvestData Ltd, Mr Ambrose Omordion, said the new board should deepen the market by introducing new more trading windows such as cryptocurrency.

Mr Omordion said that they should ensure strong investment education across equity investment to boost investor participation to enhance liquidity in the market.

He said that SEC should partner with other financial market regulators to promote capital market growth and development.

Mr Omordion called for strong technology for easy monitoring back end of all listed and unlisted companies to avoid manipulation, insider trading and others.

Publicity Secretary of Independent Shareholders Association of Nigeria, Mr Moses Igbrude, advised the SEC’s new board to make transparency, integrity and investors’ protection their watchwords.

“The capital market of any country is the barometer to measure its economy, they should ensure companies are properly managed in line with laid down rules and regulations.

“They should engage the companies to know their challenges, and carry such messages to the policy makers to formulate good policies that should enhance business growth,” Mr Igbrude said

He said that the board should engage the Federal Government on issues of multiple taxation, high interest rate, infrastructure deficiency and policy inconsistencies that affected businesses:

“This new board should make it a duty to bring more Nigerians into the market by ways of education, enlightenment to encourage them to know the importance of the capital market and how it can be used to create and grow their wealth.

“They should encourage more companies to list in the market by giving incentives and some privileges to listed entities over unlisted companies.”

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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