The Vice Chairman, House of Representatives Committee on Capital Market, Chris Emeka Azubogu is sponsoring a bill that is seeking to compel private companies, such as MTN Communications, Globacom and major players in the Nigerian oil and gas sector, who are not currently listed on the Nigerian Stock Exchange (NSE) to do so.
The bill is Titled, “Private Companies Conversion and Listing Bill, 2013,”. Here are his reasons for sponsoring the bill.
1. When passed, the bill will promote growth for both the companies and the Nigerian Capital Market.
2. He added that a major advantage would be the availability of cheap funds at the capital market to further develop the companies and the Nigerian economy.
3. Azubogu noted that by being listed on the Exchange, there would be proper regulation of the companies, with the ultimate goal of promoting micro-economic growth.
4. He cited examples with the telecommunications, power and oil sectors, where he said the players were not well regulated.
5. He said that most of these companies are not paying the appropriate tax to the federal government. The companies need to be well regulated to ensure they pay appropriate tax, comply with corporate governance and ensure full disclosure.
6. The bill will help these companies and many others to even have access to cheap funds from the capital market.
7. The aim here is to transform them into strong institutions that will outlive their original owners.
The proposed bill, will seek among others, that private companies, whose shareholders’ funds exceed N40 billion or whose annual turnover exceed N80 billion or the total assets above N80 billion, be converted to public liability companies and get their shares listed in the stock exchange.
And if companies refuse to comply?
According to him, tax waivers of up to one-third of applicable tax rate may be granted, while a fine of 10 per cent on annual turnover, as well as imprisonment of at least 2 years may be proposed for non-compliance.
Azubogu call on all Nigerians to present their submissions at the public hearing to achieve a proper law that will secure the future of the Nigerian economy and Nigerians.