Investors with multiple subscriptions to public offers to forfeit investment –SEC

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Investors with multiple subscriptions to public offers to forfeit investment –SEC



By Chinenye Anuforo

Investors in the Nigerian capital market with multiple subscriptions for the same public offer may forfeit their investment, the Securities and Exchange Commission (SEC) has warned.
The SEC at its last Capital Market Committee meeting (CMC) has approved the report of a market wide committee on formulating a uniform position for the treatment of multiple subscriptions to public offers.
According to a circular from the SEC, the Nigerian capital market cannot and should not be seen to reward the wrongful acts/illegality of the perpetrators. This was with a view to ensuring the global sustainability of the market’s integrity and reputation.
The circular observed that one major source of unclaimed dividend remains the use of non-existent identity to make multiple subscriptions to public offers. The Committee unanimously agreed that:
•The action of submitting multiple applications for the same public offer was, in every consideration, illegal.
•The wrongful acts were carried out, by the perpetrators, under false pretence.
The report describes two groups of investors involved in multiple subscriptions. The first group (Group A) of investors actually existed but joggled their names in different forms to enable them purchase more than the permitted units of shares on offer. The second group (Group B) was the class of investors that did not actually exist but used fictitious names for the purpose of purchasing more than the permitted number of shares during public offers.

 

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