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Author Name: Anonymous
Number of articles: 5
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Transcorp Nigeria - The true story?
Author: Anonymous | April 17, 2007



Story has it that the chasm between the DG of the Nigerian Stock Exchange and Chairman of the Board of Transcorp, Dr. (Mrs.) Ndi Okereke-Onyiuke and Mr. Bernard Longe, the Group Managing Director of the company has widened inexorably since January 2007 owning, among other factors (more on which later) to the ascendancy of Mr. Ayoola Obafoluke Otudeko (OFR) to the Presidency of the Nigerian Stock Exchange. Sources close to Mrs. Oreke-Ndi confirmed that Mr. Otudeko personally called her to protest the initial nomination of Mr. Longe by the Transcorp board in December 2005 to be the pioneer Managing Director. In his new position as the President of the Nigerian Stock Exchange and the boss of Okereke-Onyiuke, Otudeko apparently believed he could blackmail Transcorp into selling him additional 900million units of Transcorp shares at N1 per share even as the company was doing its IPO at N7:50 per share. He was apparently counting on using the First Bank saga to whip Mr. Longe into acquiescence. Mrs. Okereke-Onyiuke whose relationship with Otudeko goes back a long way was quite willing to oblige but would neither take the issue to the Board formally nor commit an instruction to the Group Managing Director to deal into writing. There obvious motivation for this proposed investment by Mr. Otudeko was, as usual, taking undue advantage of his new position to profiteer; there is nothing to indicate that he believes in the idea of Transcorp as an enduring organization. First Bank of Nigeria Plc which he proudly claims to own and control has never supported Transcorp and did not participating in the funding of the NITEL acquisition. Following Longe’s reported refusal to play ball, his fate was sealed. With a lethal combination of Otudeko and Okere-Onyiuke, you have a right to wonder whether the deal was thereby aborted. Stay tuned………. PS. If you still don’t understand the way the Nigerian Stock Exchange is run and operated, which approach prompted British Telecoms, the Technical Partners of Transcorp for NITEL/Mtel to withdraw its personnel citing issues of Corporate Governance, as reported in ThisDay of 10th April 2007, you need to observe what happened to the share price of Transcorp on Wednesday the 11th of April 2007. Watchers of the Transcorp stock performance in the three times that the technical suspension has been lifted and re-imposed since its IPO will have noticed its consistent downward slide, closing at N7:54 on Tuesday 10th April 2007. The following day, 11th April, the same day that the company’s Group Managing Director was sent on compulsory leave, apparently afraid of a negative reaction from the investors of Transcorp, the Nigerian Stock Exchange came up with a “clarification” of the rule it announced a while ago and the stock price was reverted back to its pre-IPO closing price of N9.71.and the technical suspension re-imposed. Thus with a stroke of the pen, figuratively speaking, a piece of Transcorp’s trading history was obliterated. It is worth remembering that the big boss of the exchange that made this sudden and most timely discovery of the “misapplication” of the rules also just happens to be the Chairman of Transcorp.

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NGEX welcomes and encourages reader comments. Permission to post reader comments is assumed, and we reserve the right to excerpt or edit for clarity any comments that are posted. We won't be able to publish all comments. And we can't vouch for the accuracy of posts from readers. Nickname or Name will be used to identify your post.
OMOTAYO, J. A.    Lagos, NIGERIA    April 20, 2007
All that is happening with transcorp should be expected. I have commented and written some articles on this NGEX exchange that the so called market forces have seized to be of any relevance in many stocks world wide.

Why? There is the now "insider and corporate gorvernance abuse" (apology to Mr. Soludo) in most issues relating to stock value.

About four to five years ago, the share price of the old conglomerate, UTC, was at its ebb, N0.68 (approximately).

Even though all the departments within the conglomerate were making losses, and without any major capital injection from share holders to run the businesses which were in comatose, the shares rose steadily from this low value to about N2.70 within a few weeks. The rest is history.

In far away America, similar thing happened with Enron energy giant. The shares similarly rose from $3.90 approximately to $6.00 within weeks. The rest is history.

One can look around and observe the shaky positions of shares in all the companies quoted at the exchange, not only in Nigeria but all over the world to draw some interesting conclusions.

The time for the application of one of the heuristic stock management principles is now here with us.

The principle is always used to better the lots of those who are good stock brokers to the detriment of the uninformed.

This principle is often called "pump and down" in-house among the stock brokers. It should have been tagged "pump and deflate" because that is what is it realy.

A pump is used to lift liquids up unto a higher level: water, oil and chemicals. Pumping the stock would then imply lifting it up artificially like the liquids. The down is the reverse to withdraw the pump. The would normally cause the crashing of the stocks.

Those in Transcorp know what they are doing, only those who paid for the IPOs are fools who do not know what to do with money.

I have written many times and I like to repeat it again that we have "low level of effective management" (apology to the World Bank on her management position paper on Africa in the early 1980s). Those in doubt should wait and see.

Nigerians have never managed any big and complex institutiion, industry, etc, since after the double purge from the civil service, without running them down.

Anybody who have examples of REAL and TRUE success stories should let me know, giving facts and figures.

The trouble with us is that we have all refused to admit that we have management problems at all levels.

Many of those in positions of authorities are strangers who should normaly not have been there if corruption and abuse of priviledges were removed from thier appointments.

That is the truth. I stand to be challenged.

God bless Nigeria.
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