Alleged Share Manipulation: EFCC Raids MTN Office, Quizzes Mgt Staff

Operatives of the Economic and Financial Crimes Commission
(EFCC) yesterday raided the head office of MTN Nigeria
Communications Plc in Falomo, Lagos over the scandal rocking the
company’s recent listing on the Nigerian Stock Exchange (NSE),
THISDAY reports.

Top management personnel of the company were said to have been
interrogated by the operatives, who stormed the telco’s corporate
headquarters at about 4pm.

THISDAY gathered that the EFCC team had demanded for documents
in connection with the share listing which were promptly provided
to them.

Although no official of the EFCC and MTN could provide official
statements on the matter, a source familiar with the deal, said the
visit of the team from the anti-graft agency was sequel to 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.”

A stockbroker, who spoke on the matter last night said the
astronomical rise in the MTN shares few days after the listing, was
a clear indication that some underhand deals must be in the
offing.

There are also growing concern among the top players in the
Nigerian bourse that if MTN shares continue to climb at such
astronomic rate, they stand the risk of being displaced from their
vantage positions as market leaders.

When contacted, the Senior Manager, External Relations at MTN
Nigeria, Mr. Funso Aina said the company would issue an official
statement on the issue.

“We will issue a statement very soon”, Aina said in an SMS to
THISDAY last night.

But as at the time of filing this report, the company was yet to
release any official statement on the issue.

Also, acting spokesman of the EFCC, Tony Oriade, told THISDAY
last night he would get in touch with the Lagos office to be able
to give accurate account of what transpired. As at press time, he
was yet to get back.

MTN had on May 16, listed its shares on the NSE by way of an
introductory listing. The listing by introduction meant that the
shares of existing MTN Nigeria shareholders were listed without an
additional public sale of shares. By this development, all MTN
Nigeria shareholders are free to trade their shares on the NSE.

But investors and stakeholders have been expressing worries
about the free float accommodation MTN Nigeria Communications Plc
was granted by the capital market regulators to pave the way for
its listing. Their concerns stemmed from the fact 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 be
forced to buy them at very high cost, whenever the telecoms company
decides to float the IPO.

The investors feared that the shares of MTN Nigeria have been
manipulated to drive the price of the stock very high before any
share offering through an IPO.

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
through the MTN’s listing on the NSE, the Commission had translated
into action, an important function of the Commission, which is to
promote local investment and ownership in the telecom sector.

“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.

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