Shareholders and market operators at the weekend remained divided over the recent acquisition of about 1.08 billion units of Central Securities and Clearing System (CSCS) shares.
According to market sources, the trades were consummated at N18 per share and traded on the NASD platform.
FMDQ Group had in 2021 reported that it was within reach of an agreement to acquire over 20 per cent of CSCS and sources had revealed that the group will buyout shares owned by Leadway Insurance and from Artemis Ltd a vehicle owned by Verod Capital.
However, the deal hit the rocks as shareholders of CSCS had disagreements over the sale. The development suggests that the matter has now been resolved thus allowing the sale to go through. This was confirmed as the CSCS released a statement that revealed that on Friday June 30, 2023, a significant trade of shares of CSCS on the NASD OTC Plc took place.
It noted that two major shareholders of CSCS, Artemis Limited and ZPC Leadway Insurance Prem. Coll & Invest, which previously held 16.61 per cent (830,641,902 units) and 5 per cent (250,000,000 units) shareholding respectively, sold their shares to FMDQ OTC Plc.
Consequently, FMDQ is now a shareholder with 21.6 per cent equity stake in CSCS.
The statement further said, “CSCS serves as the central securities depository and clearing infrastructure for the Nigerian capital markets.
Our company plays an intrinsic role in ensuring the integrity and safety of transactions conducted in the Nigerian capital market”. But in a chat with Daily Sun, shareholders accused the Securities and Exchange Commission (SEC) of trying to cause a rift between NGX Group and the FMDQ.
There have been rumours that owing to interest in the shares of CSCS by FMDQ, the SEC had mandated NGX to sell down 9 per cent of its holdings in CSCS Plc.
But shareholders believe that the Exchange could not have sold down 9 per cent of its holdings easily to attain 35 per cent considering that its demutualisation was in 2021.
The National Coordinator, Progressive Shareholders’ Association of Nigeria (PSAN), Boniface Okezie, stated that SEC’s approval might bring some sort of an unhealthy rivalry between the two exchanges.
According to him, the Commission wants FMDQ to have the upper hand by bringing the NGX Group down.
“NGX is the father of trading facilities, not FMDQ and so the SEC’s plan is to push FMDQ and hijack their business, which is detrimental to the growth of the capital market. We are not saying that the sky is not wide enough but because the CBN has holdings there, the SEC wants to go ahead and spite NGX.
This move is to water down the power of NGX and not in the interest of the market. SEC must stop dabbling into these kind of affairs. Their overbearance is becoming too much. This is the reason why delisting is happening”. He fumed.
Another independent shareholder who craved anonymity, stated that although the FMDQ had been championing sustainability principles across its business, markets and implementing innovative financial market solutions, they have allowed themselves to be used as a tool by the SEC to fight the NGX Group.
“What is stopping CSCS from listing on the NGX? You cannot then say CSCS should be trading on FMDQ and leave the one who birthed it. This is wrong. Charity begins at home and CSCS’s first point of call should be NGX. CSCS has to be listed on the NGX and not FMDQ. There is a lot of things going wrong in the market. The regulator, SEC has failed miserably in their obligations and for good 8 years, they have not even audited their accounts. What stops them from publishing their accounts in national dailies?
They have basically allowed the SEC to use them to spite the NGX Group, it is that simple.”, he said. However, the Vice-President, High Cap Securities, David Adonri, disagreed, stating that the development will help increase the much needed traction in the market. Adonri said although the NGX Group still controls the larger share and runs a Holdco structure, CSCS has preferential advantage that the FMDQ wants to leverage on.
SOURCE: THESUN
