Some Transnational Corporation shareholders have urged the Nigerian capital market regulators to void the Initial Public Offering (IPO) of Transcorp Hotels Plc.

The shareholders under the aegis of the Independent Shareholders Association of Nigeria (ISAN) made the demand in separate letters to the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE).

ISAN said that their demand became imperative following serious breach of operating capital market laws by the regulators.

ISAN, in letters signed by Sir Sunny Nwosu and Mr Adebayo Adeleke, National Coordinator and General Secretary respectively, described the approval for the recently concluded offer of the shares of Trancorp Hotels as flawed.

According to ISAN, the sale of Transcorp Hotel shares was an authorised bulkanisation of Transnational Corporation Plc.

According to ISAN, “We are not aware of any Annual General Meeting or Extra-Ordinary General Meeting as prescribed by Law, where a special resolution was proposed and passed by shareholders of Transnational Corporation Plc to dismember the company.

“Spinning off and offering for sale shares of Transcorp Hotels is an unauthorised dismemberment of Transnational Corporation Plc.”

The association said that they are constrained to draw the attention of SEC and NSE to the regulatory irregularity because the IPO of 800 million ordinary shares of Transcorp Hotels negates the provisions of the Investment and Securities Act, rules and regulations of the commission and listing requirements of the exchange.

The shareholders said their quest for probity, accountability and due process, stemmed also from the issues raised by NOGA Hotels International (NHI) SA, a major investors in Transcorp Hotels.

ISAN also said that NHI had in a subtle caveat emptor advertorial published on October 16, 2014 in some dailies, described the IPO as contrived, following unresolved issues over ownership of Transcorp Hilton Hotels, Abuja.

In their letter, ISAN members said: “We are apprehensive of the process adopted for the public offering and strongly consider it as lacking in due process.

“We believe that the shareholders approval should have been obtained at an Extra-Ordinary General Meeting (EGM) before Transcorp Hotels embarked on public offering.

“Since this was not done, we hereby suggest you urge the authorities of Transcorp Hotel to follow due process in this transaction, as not doing the right thing would amount to encouraging illegality.”

•Text courtesy of Saturday Vanguard.