The bill, sponsored by the Deputy Chairman, Capital Market Committee of the House of Representatives, Mr. Chris Azubogu, has generated debate among stakeholders.
The Private Companies Conversion and Listing Bill, 2013 was read for the second time in the House of Representatives in July 2014.
The bill seeks to compel the mandatory conversion (from private to public) and listing of all private companies that meet speci-fied thresholds in all sectors of Nigeria and grant “tax incentives” along with some reliefs on stamp duty and registration fees.
LCCI, in a statement, said that the proposed bill would negatively impact on local investment and the economy and lead to considerable loss of revenue to the government and break up of companies aiming to circumvent the requirement of the bill.
It said private companies should be left decide when and how to convert into public limited companies based on their investment and market considerations.
It added that the Nigerian Stock Exchange (NSE) may not have the depth and liquidity needed for the investment arising out of the mandatory listing of companies.
The group said that the proposed bill would negatively affect the business environment by creating undesirable, unnecessarily cumbersome regulation and scrutiny on the companies under the Companies and Allied Matters Act, 1CAMA, SEC and NSE rules and regulations.
“Going public and being listed on the floor of the stock market are critical business decisions that only the companies’ management can make,” it said, adding that the mere listing of a company’s shares would not guarantee success of the business.
The main benefits of buying publicly quoted shares are capital appreciation and the ease of disposal.
