Firm Flays NSE For Not Refunding N51.278million Aborted Offer

     Oasis Insurance Plc (now FBN General Insurance Limited) has flayed the Nigerian Stock Exchange (NSE) for not refunding the N51.278 million application and listing fee paid in 2008 on an aborted Rights Issue.

According to the lawyers of FBN General Insurance, The Lawsmiths, the insurance firm had proposed a Rights Issue/Public Offer of 2,000,000,000 ordinary shares in 2008 and issued a bank’s managers cheque on March 20, 2008 in the sum of N51.278 billion as application and listing fee on March 25, 2008.

The lawyers explained that shortly afterwards, the proposed Rights Issue/Public Offer was aborted due to prevailing unfavourable market situation then which the   NSE was subsequently informed about in a letter dated February 10, 2010 and a request was made for a refund of the sum paid in view of the fact that the exchange was yet to fully process the application as at then the firm claimed that the NSE has refused to refund the money as requested.

“Despite several letters and a meeting with the exchange’s CEO who promised to resolve the matter amicably, NSE refused claiming that Oasis’ claim became statute barred in 2014 and asked Oasis to await the decision of its Quotation Committee which was said to be meeting in March, 2015.

“Oasis then sent a petition dated 8th April, 2015 to the Securities Exchange Commission (SEC) which SEC forwarded to NSE on 20th April, 2015. NSE in a bid to present a fait accompli on SEC quickly got its Quotation Committee to meet on the issue on 30th April, 2015 (about seven days after receiving the petition from SEC) and it decided not to make a refund to Oasis,” the lawyers said.

According to the company, based on its Quotation Committee’s decision of 30th April, 2015, NSE then informed SEC that the Oasis application had been rejected at its Quotation Committee’s meeting of 14th April, 2008 (21 days after receiving the application fee) and attached a letter dated 22nd October, 2010 to support its case.

“However, NSE’s defence falls flat in view of its earlier letter dated 6th May, 2008 to Summit Finance inviting the Financial Advisers, Oasis Insurance’s CEO and the Joint Issuing Houses to a meeting of its Quotation Committee on 7th May, 2008 to defend the application with necessary documents that 21 days after allegedly rejecting the same application on 14th April, 2008. Moreover, NSE was unable to show any evidence that its alleged Quotation Committee’s decision was communicated to anyone till date.

“To make matters worse, one of the Joint Issuing Houses, Intercontinental Capital Markets Limited, in its letter dated 25th September, 2008 advising Oasis to review its Offer price downwards based on the falling prices of stock prices and especially insurance stock prices had stated as follows;

“In the last six months since Oasis price went on technical suspension, the prices of the other stocks have been falling. Below is a comparison of the average stock prices (insurance companies) in April and September, 2008,” they explained.

The company noted that NSE’s claim that Oasis’ offer application was rejected on 14th April, 2008 was a false statement intentionally and purposely made to mislead SEC and pervert the course of justice.

“In fact, the NSE’s statement to this effect in its letter of 6th July, 2015 and  its letter dated 22nd October, 2010 (both constitute fraudulent representation and forgery) are criminal offences punishable with imprisonment under Sections 120, 125A, 126, 192, 464, 465 and 466 of the Criminal Code Act”, Lawsmiths declared.

The NSE declined to comment on the issue, saying SEC was already handling it and they would wait for the decision of the market regulator. However, a stockbroker who spoke to THISDAY on the development said there are rules guiding all activities in the market, stressing that once the rules are followed issues like this will not arise.

“I believe if an issuer follows the rules guiding operations in the market, there would not be any controversy or NSE wanting to circumvent the rules it created to guide operators and issuers in the market. I am sure the matter will be resolved amicably according to the market rules,” the broker said.