The Nigerian Stock Exchange Issued a press release regarding Oando’s rights issue as follows;
OANDO PLC: SUSPENSION OF TRADING IN RIGHTS – Effective today, November 28, 2014, The Nigerian Stock Exchange suspended further trading in Oando Rights until further notice. The action was necessitated by information received yesterday, November 27, 2014, evening from Vetiva Securities Ltd, the Lead Stockbroker to the Issue, that Oando Plc has not obtained a formal clearance of the Offer documents and registration of the shares from the Securities and Exchange Commission. Please note that the Oando Rights traded to date will be reversed.
What it means?
- Oando did not obtain requisite approvals from the Securities and Exchange Commission before embarking on the rights issue. You must obtain SEC approvals before embarking on a rights issue
- The Rights Issue was consequently suspended
- Anyone who had bought the rights issue during the week will get a refund as the rights will be reversed
- This is the second time in three months that the SEC will go on to reverse corporate actions that have been given the green by the NSE. The NSE of recent appears to be soft in its regulatory oversight
- It is quite embarrassing that a company like Oando will embark on a rights issue without obtaining requisite regulatory approvals.
- This could lead to erosion of investor confidence and cause trust issues
- Oando share price dropped 4.9% by close of trading Friday to N20.76