The Securities and Exchange Commission (SEC) has commenced investigation of companies that floated private placements not yet quoted on the Nigerian Stock Exchange (NSE).

Management sources at the commission confirmed the development to the News Agency of Nigeria (NAN) in Lagos.

NAN also gathered that the SEC moves followed the discomfort which the unfortunate development is causing the investing public and the huge funds trapped in the stagnated investment.

“Specifically the management has written the companies involved, especially those that indicated intention to list on the nation bourse in their prospectus during the funds raising,” the source said.

According to the source, the commission, under the new management, has declared a zero tolerance level to practices that would affect investors’ confidence.

Th source said that the commission was determined to stamp out misleading information or promises by issuers and marketers in respect of listing.

Mr Boniface Okezie, President, Progressive Shareholders Association of Nigeria (PSAN), commended SEC moves to sanities the market.

He urged companies that raised private placement during the boom period in the market to walk the promises of seeking quotation.

Okezie said that there were myriads of primary market activities without complete regulatory oversights on the initial funds raised and the state of the seed capital.

Available information at the Nigerian Stock Exchange (NSE) showed that more than 300 private placements were marketed during the boom period with most of them being over-subscribed.

NAN also recalls that the private placement in the period under review was one the best options and most successful medium of raising long term capital as against the highly regulated Initial Public Offering (IPO) of securities