STOCKBROKERS REJECT BAIL OUT PACKAGE OVER STRINGENT TERMS
http://www.nigerianbestforum.com/blog/?attachment_id=121511 Strong indications have emerged that most of the 84 stockbroking firms given forbearance by the federal government would turn down the offer following the stiff conditions attached to it.
The stockbrokers consider the conditions attached to the forbearance too stringent in view of the fact that they were not entirely responsible for the crisis.
They also beleive that the N22.6 billion announced by the federal government is highly inflated as the stock market recorded over 30 per cent gains since the amount was last updated.
The federal government had announced a N22.6 billion bailout option for the stockbrokers but however attached some conditions which prohibit brokers benefiting from the package from providing any professional services to AMCON for a period not less than three years.
The conditions also require greater disclosure to the Securities and Exchange Commission (SEC), places limit on the stock brokers' debt financing, use of custodians, while also placing trading restrictions on them.
However, some of the stockbrokers, who spoke to LEADERSHIP on condition of anonymity, said they considered the conditions too restrictive and as such may not be able to meet up with the rules.
They also insisted that they did not break any laws when they obtained the margin facilities since there were no laws governing the transactions at the time.
The Chairman of the Association of Stockbroking Houses of Nigeria (ASHON), Mr Emeka Madubike, confirmed that some of the stockbroking firms would be rejecting the forbearance offer saying, 'We have met and have decided that the conditions are okay and although some stockbrokers will not be taking the offer, majority will be taking it. This forbearance offer is not automatic, anybody who does not want to take it has the option of walking away.'
'However, the most important thing for us is that the government is finally recognising the importance of the capital market to the economy and they are looking our way,' he stated.