Redacted article courtesy of – Premium Times
It is increasingly hard to tell private and public firms apart in Nigeria, given that the portion of companies’ shares regulators require to be owned by outsiders – persons other than companies’ directors and insiders – already negligible before now, is fast shrinking out.
And market watchdogs appear to aid a trend that is not only diminishing the rights of minority shareholders, but increasingly making it a possibility for insiders to use their huge holdings to manipulate the market, a PREMIUM TIMES investigation has found.
The Nigerian Exchange Limited (NGX)’s rule stipulates that every company listed on its premium and main boards, the two principal listing segments, ensure a minimum of 20 per cent of the company’s total shares is held by the public and available for public trading. This portion of shares that can be publicly traded is called free float.
The remaining 80 per cent could be held by a league of privileged investors called insiders, often comprising directors and their relatives, promoters and, in some cases, governments.