22 May 2019

Nigeria: MTN and 20 Billion Shares

Definitely, MTN is at it again and EFCC should please move in and investigate the whole process of the listing by introduction of 20 billion shares that is literally not seen by anyone and just being discreetly traded within the holders of the stock to push up the price up to the point it will be off loaded and dumped on the unsuspecting and innocent investing Nigerian public.

Would I call it Mauritius/South African wonder that 20 billion shares of a foreign-controlled company were listed in our national bourse and almost all the citizens of the nation who desire to buy the shares of the foreign company can't find just one unit out of the 20 billion to buy? On our own bourse!

While this artificial scarcity may have made sense if it was caused only by the forces of demand and supply but looking at the holding structure of the MTN shares and when I calculated the amount the foreign major shareholder, MTN Mauritius, which allegedly owns 76.08% of the 20 billion shares has made since the listing last Thursday, my fear as a Nigerian citizen and investor was confirmed.

According to premium times 76.08% of the 20 billion shares are owned by the foreign investor, MTN International. It's this foreign investor that was fully in charge of MTN during the period of regulatory infractions by MTN. The bankers of the company got slammed with heavy fines by the CBN and MTN itself fined N330b by NCC (after a reduction from N1.04 trillion), with another alleged case of tax infraction against MTN from the office of the Attorney General of the federation still in the court. I am seriously worried as a citizen if the government doesn't protect its investing citizens from MTN investors.

How much has been made by the foreign investor?

MTN International (Mauritius) Limited, has the controlling 76.08 per cent equity, or 15,485,544,050 shares which was listed at N90. As at Monday, 20 May 2019, the same share costs N119; if you subtract the amount it was listed by introduction, it means the foreign investor has realised N29 on each unit of the 15,485,544,050 totalling a whopping N449,080,777,450 (approx half a trillion naira) in three days! By hoarding the shares and "moving the shares among the holders" under the pretext of cross deals, if not stopped immediately, the price will be artificially pushed up and later dump it on the unsuspecting and innocent investing Nigerian public. Yet no value has been created in the Nigerian economy while MTN eventually repatriates the funds back to Mauritius and most likely eventually South Africa, the homestead of the real owners of MTN. For me, I believe this is not a fair way a foreign company like MTN should reward its host Nigeria and Nigerians for the love shown to the company and its brand.

What did the regulators say? The management of the Nigeria Stock Exchange (NSE) issued a press release few days ago and reading the script reminds me of the build up to the crash of the market in 2008 from which the market is yet to recover, unlike other bourses. The release was titled "NSE clarifies Concerns on MTN Nigeria, http://www.nse.com.ng/mediacenter/pressreleases/Pages/nse-clarifies-concerns-on-mtn-premium-board-listing.aspx.

The NSE is clearly not seeing the damage being done to the market or pretends not to be seeing it and the reasons are not far fetched. The NSE is smiling to the banks receiving mouth-watering commissions from these 'cross deals'.

Sunkanmi Vaughan, Lagos

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