BY PETER EGWUATU

Investors have continued to lament over Starcomms Plc’s private placement, saying it was fair for the company to have collected money from more than 50 investors, in contravention of the Securities and Exchange Commission (SEC)’s rule on private placement.

Some of the investors whose money were trapped in the private placement had stated that collecting money from more than 50 people means that it was a public offering.

Meanwhile, it is alleged that Maan Lababidi, the Chairman of Starcomms Plc was squizzed last week Tuesday by officials of the Economic & Financial Crime Commission (EFCC) in its Lagos office .

The questioning is coming on the heels of petitions by top Nigerian investors in respect of the company’s year 2008 Private Placement (PP) handled by Stanbic IBTC Chapel Hill Denham as Issuing Houses.

It was  gathered that Stanbic IBTC and Chapel Hill have began to make moves to stop further interest in the matter; by refunding key players in the Nigerian Capital Market (NCM) involved in the matter that were not allotted shares their money.

Vanguard gathered  many other Nigerians invested various sums of money in the said private placement and are not on the list of 43 persons approved by Nigeria’s Securities & Exchange Commission (SEC) for the Private Placement transaction.

The SEC approved allotment  showed that only 43 investors participated in the Private Placement. It was also gathered that many Nigerian investors paid monies into the offer Proceeds accounts, but statutory requirement allows for 50 investors to have been offered or allowed to pay into these accounts (SEC Rule 90(i), yet only 43 investors got allotted.

Meanwhile, one of the petitioners, Mr. Ayoleke Adu, Managing Director/CEO, MorganCapital Securities Limited had said that Starcomms’ private statement was not transparent.

According to him, “Most of the investors that deposited money into the offer proceeds account but who were not among the 43 investors on the SEC-cleared allotment list, did not get refund.

to them as statutorily required. However, their monies were illegally converted and they were thereafter issued share certificates through very questionable procedures that did not involve a share transfer form (another statutorily requirement for transfer of shares).

This suggests that the several billions of naira collected from innocent Nigerians might have been converted for the purpose of the bogus Private Placement, even though the owners of the monies are not on the list of 43 persons approved by SEC.”

He revealed that the Issuing Houses deliberately created and encouraged the use of Investment Vehicles to aggregate many subscribers and thus tried to circumvent the rule that a private placement should not be offered to more than 50 people.

In his words, “ However, the use of Investment Vehicles and subsequent assignment of shares in a private placement had been anticipated as a fraudulent practice by the framers of the ISA, and the ISA has made such a practice to mean the underlying transaction was a public offer, even if it was called a private placement (see ISA section 69 – 1c); and All requirements of a public offer must thus be met otherwise the subscribers to such a scam may rescind their decisions and ask for a reimbursement at anytime they so choose but before the winding-up of the parties involved in the act.

Please see ISA Section 67 (3 & 4). Being a private placement, the Issuing Houses were not allowed by law to make an offer to the public. But this is exactly what they did.”