The Securities and Exchange Commission has said that the order given to Zenon Oil Limited, the core investor in African Petroleum Plc, to divest part of its holdings in the company was not connected with corporate governance concerns. This was in response to some reports making the rounds lately that the directive of the commission to Zenon to reduce its holding in AP by selling part on the floor of the Nigerian Stock Exchange was given for some other reasons.

In an e-mailed statement, received by our correspondent on Saturday, the regulator stated that the directive was borne out of the need to ensure that the core investor complied with the requirements of Section 131(a) & (b) of the Investments and Securities Act 2007. According to the statement, “Following its investigation into the suspected manipulation of share price movement of AP Plc in April 2008, SEC had established that the core investors in the company, that is Zenon Oil Limited and ZSL A/C FOZ, had acquired up to 42.73 per cent of AP’s shares through collective and separate transactions.”

Zenon Oil and ZSL are both controlled by AP Chairman and Chief Executive, Mr. Femi Otedola.
SEC added, “The single holding of 42.7 per cent in a company done via several transactions is above the 30 per cent threshold set by Section 131(a) & (b) of the Investments and Securities Act 2007 (ISA 2007), beyond which the beneficial holder is required to make a mandatory take-over bid.”

In the statement signed by the Head, Media, SEC, Mr. Lanre Oloyi, the commission stated that it had drawn the attention of investors to this irregularity and advised that either a takeover bid was made to enable them go beyond the threshold of 30 per cent set by Section 131(a) & (b) of ISA 2007, or come down within the threshold.

“It is, therefore, clear that the reason behind the directive was the need to comply with section 131(a) & (b) of the ISA 2007, which stipulates the procedure for owning more than 30 per cent of a publicly quoted company through separate and piecemeal transactions.

“The SEC wishes to reiterate that subject to the requirement that a minimum of 25 per cent of the shares of publicly quoted companies be made available to the public, there is no limit on what an investor can own in a publicly company in Nigeria.”