Banks, firms in N11b deals at Nigerian Exchange

– Otedola sells down FBN Holdings’ stake

Several insider deals worth about N11 billion have been recorded at the Nigerian Exchange (NGX), highlighting active influential transactions by directors and senior management of quoted companies.

In a series of transactions and disclosures, trading reports and official corporate filings at the stock market indicated that several insider deals, involving major quoted companies and significant shareholders, were consummated in the past three days.

The insider share transactions involved significant shareholders and directors of FBN Holdings, FCMB Group, Nestle Nigeria, Guaranty Trust Holding Company and United Capital. The total transaction value for the deals was about N10.71 billion, according to calculation by The Nation.

In a major selloff, billionaire businessman Femi Otedola, who became the single-largest individual shareholder in FBN Holdings with the acquisition of 7.57 per cent equity stake last year, sold about 2.33 per cent equity stake in series of deals valued at N9.3 billion.

About 835 million shares were sold by the businessman, reducing his equity stake to about 5.24 per cent.

Trading reports indicated that Otedola sold shares across his direct shareholding and indirect shareholdings, including four indirect shareholding firms where he is the beneficial shareholder.

Also, four directors of FCMB Group, including the company secretary, yesterday mopped up about 11.4 million shares of the financial services holding group.

An insider’s source said the transactions by the directors were approved by the board of the group.

The reports showed that Nestle S.A, the majority foreign shareholder in Nestle Nigeria Plc, has been buying retail minority shares through secondary market transactions. The core investor has staked about N1.4 billion on acquisition of retail shares in the past few days.

In another disclosure, the recently inaugurated chairman of Guaranty Trust Holdings Company (GTCO) Plc, also acquired shares of the company in a deal valued at N4.5 million.

United Capital has also reported insider shares purchase by senior management staff and their relative. According to the reports, three senior management staff and wife of a top management staff had acquired shares of the company within the past 48 hours.

Insider deals have come under intense scrutiny at the stock market as capital market regulators seek to plug loopholes that confer undue advantages on directors, major shareholders and others who by virtue of their positions and association have access to sensitive information.

Section 315 of the Investments and Securities Act, No. 29, 2007 (ISA), describes an insider among others as “any person who is or is connected with the company in one or more capacities as a director of the company or a related company; an officer of the company or a related company; an employer of the company or a related company; an employee of the company, involved in a professional or business relationship to the company; any shareholder of the company who owns five per cent or more of any class of securities or any person who is or can be deemed to have any relationship with the company or member and members of audit committee of a company.”

Capital market regulators had recently undertook substantial review of rules to identify possible loopholes and prevent insiders and their related persons from taking undue advantage of the market and the general investing public.

Securities and Exchange Commission (SEC), Nigeria’s apex capital market regulator and the NGX Regulation Limited, which regulates trading on the NGX, reviewed their rules and regulations with a view to aligning them with current realities and strengthening the regulatory frameworks against abuses.

The reviews and amendments included areas such as fairness and equitable treatment in material corporate changes such as mergers and acquisitions,

The reviews and amendments included areas such as fairness and equitable treatment in material corporate changes such as mergers and acquisitions, corporate restructuring, spin-off, possession and trading on price-sensitive information, takeovers, consolidation and corporate split among others.