By Peter Egwuatu
Capital market operators and other stakeholders have called for amendment of some sections of the new Company and Allied Matters Act (CAMA) as a precondition for revival of the Nigerian capital market.
They stated this during the first hybrid 2020 conference of the Chartered Institute of Stockbrokers, CIS in Lagos with the theme, “Navigating through the Storms-Reenergizing the Economy through the Capital Market”.
The new CAMA has been under attack by different stakeholders over some of its sections that are anti-investment.
A key speaker at the confab, Mr Asue Ighodalo, Chairman of Sterling Bank Plc, explained that much as the new law contains many sections that would enhance the growth and development of the capital market, there was a need to review some of the sections that could inhibit market growth.
He stated: “Section 142 of the Act provides that a company shall not in any event allot newly issued shares unless they are offered in the first instance to all existing shareholders of the class being issued in proportion as nearly as may be to their existing holdings. The applicability of this provision does not distinguish private and public companies.
“The implementation of this provision will pose significant problems for public companies seeking to raise capital by the issuance of new shares. In undertaking such capital raising transactions, public companies would not be able to make public offers or undertake private placements without first making an offer to all their shareholders.
“This amendment has raised concern amongst operators, corporates and investors, and is a significant deviation from the provision of the repealed Act which only specified pre-emptive rights for private companies.”
In his welcome address, the President, CIS, Mr Olatunde Amolegbe, explained that finding solutions to Nigeria’s economic problems was at the heart of this year’s conference objective.
Amolegbe noted that Nigerian stockbrokers had skills and competencies that positioned them to assist the government in providing solution to funding infrastructure deficit.