There were media reports, late Friday night, purporting that the Economic and Financial Crimes Commission (EFCC) raided the head office of MTN Nigeria Communications Plc.
The reports said that the anti-graft agency shut down all business activities at the Falomo, Lagos Island office of the leading telecoms company.
The purported reports went further to speculate that the reason for the “raid” was due to complaints emanating from the alleged manipulation of MTN Nigeria‘s shares on the Nigerian Stock Exchange.
A source close to the situation was even quoted as saying “I believe the EFCC was informed that MTN was manipulating figures and also, maybe because of fraud pertaining to the company’s listing.”
Not a Raid after all: A preliminary investigation by Nairametrics suggests that the development is not as it had been reported. While the EFCC did visit MTN‘s head office yesterday, the visit did not constitute a raid. Moreover, there was no shutting down of the office complex, contrary to reports.
A source at MTN Nigeria informed Nairametrics that the telco has been compliant with all regulatory requirements; including the EFCC‘s anti-fraud requirements.
So why the EFCC visit? We also understand that the visit by the EFCC to MTN Nigeria‘s head office might have been a routine one. After all, no arrest was made.
In the meantime, neither MTN Nigeria nor the EFCC has officially reacted to this development. Nairametrics will keep you posted as more details emerge.
The Backstory: Controversy began to trail MTN Nigeria‘s listing by introduction on the Nigerian Stock Exchange after many investors realised they cannot easily buy it due to liquidity issues. As you may already know, the leading telco has yet to conduct an initial public offering, because the company is not looking to raise funds in the meantime. As a result, this has made it impossible for many investors to buy the stock.
In the meantime, however, some of MTN‘s core investors have been engaging in off-market sales in a bid to take advantage of the growing demand for the stock. Note that the high demand for MTN Nigeria shares had pushed up the price from the initial listing price of N90 to around N140 on Friday.
MTN’s First loss: Meanwhile, the telecom company’s stock recorded a loss on Friday. This is the first it was losing since its listing on the NSE about a week ago. As Nairametrics earlier reported, MTN‘s bull run on the Nigerian bourse was interrupted, yesterday, when it lost by 6.04% to close at a price of N140. Prior to this time, it had been making the NSE top gainers’ list since Thursday, May 16th.
In light of the purported raid by the EFCC, it is easy to assume that the stock’s Friday decline could be connected to the EFCC development. However, it is best not to assume anything at this point until we hear from both the company and the anti-graft agency.