The compelling logic of the market and not legislative fiat should determine whether or not private companies decide to seek a listing on the Nigeria Stock Exchange (NSE) or any exchange or bourse for that matter. This is how it should be in market-driven economy and within common sense.
For this reason, the proposed bill titled ‘Private Companies Conversion and Listing Bill 2013’ should be stopped dead in its tracks. There are far more important issues which require the urgent attention of scarce legislative time. The empire builders who want major players in telecommunications, oil and gas and so forth to list should focus their whim elsewhere.
Companies list on a bourse when there is a sensible need to do so. Forcing them to do so could disrupt their entire business model and thereby debilitating on the nation’s economy. Many widely admired international brands are not listed. They must have sensible reasons. Some for a start have an aversion to the pressure to pay large dividends annually and prefer to build up reserves which they can do only as a private companies.
In addition, the forced marriages and government induced listing of banks had a catastrophic effect upon the economy which we have not entirely escaped from as the Asset Management Company of Nigeria (AMCON) will readily attest to. Forced listings will not only lead to the cooking up of the books, but those who do not wish to list will bring forth all manner of creative accounting to escape from listing.
The proposed bill is a mindless diversion and should be thrown down the drains.
