By MICHAEL EBOH

A group of shareholders of Premier Breweries Plc have called on the Securities and Exchange Commission, SEC, to launch an investigation into the just-concluded rights issue of the company.

The shareholders, in a petition to SEC made available to Vanguard, urged SEC to intervene, using its regulatory powers to stop perceived irregularities perpetrated by a few individuals in the company and unprofessional conduct on the part of some market operators, so as not to further erode investors’ confidence in the market.

The shareholders, who claimed to have been shortchanged in the just-concluded rights issue by Premier Breweries Plc, called on SEC to act swiftly to save the stock market from further derailment.

The shareholders accused the company of fraud and unprofessional conduct calling on the regulators to cancel the entire exercise.

The petitioners claimed that they had participated in the rights of Premier Breweries Plc, which was sold on the floor of the Nigerian Stock Exchange (NSE) on June 27 this year.

They added that afterwards, they forwarded all necessary documents required for the transaction together with a cheque to the Exchange.

They said, “On 11 July, 2011, we made our returns to UBA Registrars Limited, attaching the duly noted documents, the remittance schedules and Fidelity Bank Manager’s cheque number 570537 in the sum of N8.766 million made payable to UBA Registrars – Premier Breweries’ rights account. All these were duly acknowledged and received same date.

“We were therefore surprised when on July 18, 2011, a week after our returns were received and funds cleared into their account, to see a letter from UBA Registrars with their attached manager’s cheque notifying us that our returns were rejected”.

It is particularly surprising that an operator in the capital market at this age and time will receive investors’ return and funds only to reject the returns a week after clearing the funds.

“It is also not clear why the issuer will be instructing the registrars and the issuing house on how to carry their professional assignments. It appears some individuals with vested interest are bent on disenfranchising shareholders from trading and/or taking up their rights. This trend is unhealthy for the market considering the concerted efforts of the regulators to boost and restore investors’ confidence in the market,” said the investors.

The company has in the past, made various efforts to shore up its capital base. Recently, it rejected a $5 million investment from a group of foreign investors who wanted to restart its operations that has stopped for some years.

Premier Breweries then proceeded to raise funds via a rights issue of 867, 680,940 ordinary shares of 50 kobo each at N1.00 per share, on the basis of seven new shares for every one share previously held by its shareholders as at July 31, 2010.

The company in its prospectus to the offer said the purpose of the rights issue is to reactivate its operations to start production, upgrade existing storage facilities and provide efficient working capital.

THISDAY’s finding revealed that the NSE was appalled by the fraudulent act and has directed that the situation be reversed or the shares will not be listed.