By Agency Reporter

Wednesday, 9 Feb 2011

The Independent Shareholders Association of Nigeria has blamed the regulatory authorities for the slow pace of recovery of the Nigerian capital Market.

The group said that the regulators had not provided clear direction to guide the recovery of the market.

The National Coordinator of the group, Mr. Sunny Nwosu, expressed this in an interview with the News Agency of Nigeria in Lagos on Tuesday.

Nwosu alleged that at the moment, there was no clear cut signal on the relationship between the bailed-out banks, their prospective buyers and the fate of their shareholders.

He said that, although the Assets Management Corporation of Nigeria had taken off, much still needed to be done to boost activities in the capital market.

He said, “We believe that AMCON will have significant impact on the banking industry but shareholders don’t have so much hope in AMCON.

“As of now, there is no clear cut signal as to how the new core investors will come in and take up the banks.”

According to him, the whole issue of what should be the relationship between the prospective core investors and existing shareholders of troubled banks has not been resolved.

Nwosu urged the Central Bank of Nigeria to carry shareholders along in its efforts to recapitalise the banks.

“The shareholders do not know their fate. They are not aware of who the supposed bidders of the banks are,’’ he said.

The coordinator of the group, however, expressed optimism that the CBN would direct the affected banks to hold extra-ordinary general meetings to discuss the fate of the minority shareholders.

He said, “It is as if the CBN has a game plan, it has kept everything to its chest. There is a lot of secrecy about the whole issue. The market will continue to react poorly because investors do not have a clear cut direction about the market. Shareholders are not aware of developments in the troubled banks.

“There is a lot of confusion. The CBN is not coming out with decisions that will add value to the market.”

NAN reports that shareholders of four of the troubled banks in August, 2010 sued the CBN and its Governor, Mr. Lamido Sanusi, over purported plans to sell the banks to new investors.

The affected banks were Union Bank of Nigeria Plc, Oceanic Bank International Plc, Intercontinental Bank Plc and AfriBank Plc.

Source: Punch