The Securities and Exchange Commission (SEC) has observed with great concern, the recent wave of private placements by some private companies. These companies are offering their shares to raise money from unsuspecting members of the public.

The public is hereby notified that the securities of wholly private companies are not registered with the Commission as private companies and are by law outside the regulatory purview of SEC. However, any company that has membership in excess of 50 persons is by law a public company and therefore required to comply with the requirements of the Commission in terms of making offers to the public.

 Members of the public who buy shares of private companies that are neither registered by the Commission nor listed on the Nigerian Stock Exchange (NSE) are therefore doing so at their own risks. The SEC is committed to effectively regulate and develop the Nigerian Capital Market and make it investor friendly.

Meanwhile, it would be recalled that earlier February, 2008,  SEC had  announced sanctions against companies that unnecessarily delay the issuance of share certificates of their public offerings and return surplus monies to investors. Henceforth, the shares of such companies will be suspended from trading on the floor of the Nigerian Stock Exchange (NSE).

The Commission also ruled out preferential allotment of shares on public offers and also directed that Registrars can no longer maintain register of their related companies with effect from April 2008.

The sanction is to further protect the investing public and guarantee greater confidence in the Nigerian capital market.

A spokesperson for the Commission, Mr. Lanre Oloyi confirmed to Vanguard that the move by the Commission to sanction erring companies is to prevent further delay in issuance of share certificates on public offers.

 SEC warned over the weekend that any public company found to have violated its rules and regulations relating to the dispatch of share certificates and return/surplus monies will have its listed securities suspended indefinitely from trading on the floor of the Nigerian Stock Exchange (NSE).

 All such defaulting companies, according to the apex regulator of the Nigerian capital market, shall not be allowed to access the Nigerian capital market until all outstanding complaint against them are cleared to the satisfaction of the Commission.

The Commission also warned in a public notice that henceforth it shall not entertain any application for preferential allotment.