By Mustapha Babalola Toheeb
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INTRODUCTION
The proposed listing of Dangote Petroleum Refinery on the Nigerian Exchange Limited is expected to be one of the most significant developments in the history of Nigeria’s capital market. Dangote Petroleum Refinery is not yet a publicly traded company merely because its Initial Public Offering documents have been signed. The signing represents an important stage in the process, but members of the public can only subscribe in accordance with the final offer documents approved by the relevant regulatory authorities. According to available reports, the public offer is expected to open on 14th of September 2026 and may involve approximately 4.1 billion ordinary shares offered at ₦525 per share. If fully subscribed, the offer could raise approximately ₦2.15 trillion. Against this background, there are five important legal issues that every prospective investor should understand.
- The first issue concerns the legal difference between an Initial Public Offering and the actual listing of a company. An Initial Public Offering is the process through which a company offers its shares to members of the public for the first time. Listing occurs when those shares are formally admitted to trading on a recognised securities exchange. Therefore, although the IPO documents have reportedly been signed, it would be legally inaccurate to say that Dangote Petroleum Refinery is already listed unless and until its shares have been formally admitted to the Nigerian Exchange.
The principal legislation governing the offer is the Investments and Securities Act 2025, which repealed and replaced the Investments and Securities Act 2007. Section 86(1) of the Act requires securities offered to the public to be registered with the Securities and Exchange Commission. The offer must also comply with the SEC Rules and Regulations and the applicable listing requirements of the Nigerian Exchange Limited. The SEC is Nigeria’s principal capital-market regulator and is empowered to protect investors, regulate public offers and preserve the integrity of the securities market. Nevertheless, registration or approval by the SEC does not mean that the Commission guarantees the profitability of the investment, the accuracy of every commercial projection or an increase in the market price of the shares. Regulatory approval should never be interpreted as investment advice.
- The second issue is the legal importance of the prospectus. The prospectus is not merely an advertisement intended to attract investors. It is the principal legal disclosure document upon which members of the public are expected to base their investment decisions. Under the Investments and Securities Act 2025 and the SEC Rules, an issuer seeking money from the public must provide material information about its business, financial position, liabilities, ownership structure, use of the offer proceeds, material contracts, pending litigation and the risks associated with the investment.
The prospectus should therefore explain the number and class of shares being offered, the offer price, the basis of the company’s valuation, the rights attached to the shares and the purpose for which the money raised will be used. It should also disclose the refinery’s existing debts, operational risks, dependence on crude-oil supplies, foreign-exchange exposure, related-party transactions, regulatory risks and any material legal proceedings involving the company.
The law imposes consequences where a prospectus contains an untrue or misleading statement or omits a material fact necessary to prevent the document from being misleading. Depending on the circumstances, the company, its directors, promoters and professional advisers may incur civil, regulatory or criminal liability. A prospective investor should consequently rely on the final SEC-approved prospectus rather than social-media publications, statements by unofficial agents or predictions based solely on the Dangote name. See section 113 of the Investments and Securities Act 2025.
- The third issue concerns the lawful method of purchasing the shares and protection against fraud. The Investments and Securities Act 2025 prohibits unauthorised persons from carrying on regulated capital-market activities. Members of the public should therefore subscribe only through the issuing houses, stockbrokers, banks, receiving agents or electronic platforms officially identified in the approved offer documents. A person should not transfer money to an individual or an unofficial account operated by someone claiming to reserve Dangote Refinery shares.
This protection is particularly important because fraudsters may create false subscription forms, websites, social-media pages and payment accounts to exploit the enormous publicity surrounding the IPO. Before making any payment, an investor should verify that the relevant stockbroker, issuing house or capital-market operator is registered with the SEC. The SEC maintains facilities through which members of the public may check registered operators, enforcement actions and known investment scams on its official website.
Investors must also ensure that their names, bank details, Bank Verification Numbers and Central Securities Clearing System account information are correctly supplied. These details are essential for the electronic allotment of shares and the payment of future dividends. Where an application is unsuccessful or only partly successful, the refund of unallotted subscription money must be handled in accordance with the prospectus and applicable regulatory requirements. Any unexplained request for cash payment or transfer to a personal account should be treated as a serious warning sign.
- The fourth issue relates to the legal rights acquired by shareholders and the limits of those rights. The rights and responsibilities of the company, its directors and shareholders are primarily governed by the Companies and Allied Matters Act 2020, commonly known as CAMA 2020. A successful applicant who receives an allotment becomes a member and shareholder of the company. Depending on the class of shares and the company’s articles of association, that shareholder may be entitled to receive notices of general meetings, attend and vote at those meetings, receive declared dividends and participate in the distribution of the company’s remaining assets after creditors and other superior claims have been settled.
However, purchasing shares does not give an individual investor the right to participate directly in the daily management of the refinery. It also does not give a shareholder the right to demand free or discounted petroleum products. The directors are responsible for managing the company, subject to the powers reserved for shareholders by CAMA and the company’s articles.
Section 305 of CAMA 2020 places directors in a fiduciary relationship with the company. Directors must act in good faith and in what they consider to be the best interests of the company as a whole. They must exercise their powers for proper purposes and must not allow personal interests to conflict improperly with their responsibilities. This provision will be particularly important where the refinery enters into transactions with other companies within the Dangote Group. Such related-party transactions must be handled transparently and in accordance with applicable corporate-governance and disclosure requirements.
Section 275 of CAMA 2020 also requires a public company to have at least three independent directors. Independent directors are expected to provide objective oversight and reduce the risk of the board being controlled entirely by the majority shareholder or persons connected with that shareholder. This requirement is especially relevant where the existing owners are expected to retain substantial control after the IPO. The statutory corporate-governance framework is contained in the official Companies and Allied Matters Act 2020.
Potential investors must also understand that dividends are not guaranteed. Sections 426 to 428 of CAMA 2020 regulate the declaration and payment of dividends. A final dividend is generally declared by the company in general meeting upon the recommendation of the directors, and the shareholders cannot properly declare an amount exceeding what the directors have recommended. Dividends must be paid from distributable profits, and a company should not make a distribution where there are reasonable grounds for believing that it would be unable to meet its liabilities after the payment. Thus, even if the refinery earns substantial revenue, every shareholder does not automatically have a legal right to receive a dividend every year.
- The fifth issue concerns the extensive legal obligations that will continue after the company becomes publicly listed. Listing will make Dangote Petroleum Refinery subject to continuing disclosure, financial-reporting, corporate-governance and market-conduct requirements. It will be expected to disclose material information that could influence the market price of its shares. Its directors and senior officers will also be required to comply with rules on conflicts of interest, related-party transactions, directors’ dealings and the protection of minority shareholders.
Part XI of the Investments and Securities Act 2025 addresses prohibited market practices, including false trading, market-rigging transactions, misleading statements and insider dealing. Directors, employees, advisers and other connected persons who possess material information that has not been disclosed to the public must not use that information to buy or sell the company’s shares. They must also not communicate such information improperly to another person for trading purposes. Similarly, no person may create a false appearance of active trading, artificially influence the share price or circulate misleading information intended to induce other people to buy or sell the shares.
Becoming a listed company will not remove the refinery’s obligations under petroleum-sector legislation. Sections 183 and 184 of the Petroleum Industry Act 2021 deal with the grant of crude-oil refining licences and the general duties of a crude-oil refiner. The Nigerian Midstream and Downstream Petroleum Regulatory Authority remains responsible for regulating relevant aspects of refinery operations. Therefore, the refinery must continue to comply with its licence conditions, operational standards and other regulatory requirements regardless of its status as a public company.
The refinery will also remain subject to the Federal Competition and Consumer Protection Act 2018. The size and strategic importance of the refinery do not exempt it from rules prohibiting anti-competitive agreements, abuse of a dominant market position and conduct capable of harming competition or consumers. Any future mergers, acquisitions or arrangements capable of substantially preventing or restricting competition may require examination or approval by the Federal Competition and Consumer Protection Commission. Environmental legislation, including the Environmental Impact Assessment Act, will also continue to apply to qualifying expansion projects and activities capable of having a significant effect on the environment.
CONCLUSION
The proposed Dangote Petroleum Refinery IPO may give Nigerians and other eligible investors an opportunity to acquire an ownership interest in one of Africa’s most prominent industrial projects. Nevertheless, the size, popularity and national importance of the refinery should not replace proper legal and financial due diligence. Potential investors should read the final SEC-approved prospectus, examine the company’s financial position and risk disclosures, understand the rights attached to the shares and subscribe only through authorised channels.
Most importantly, SEC approval should not be mistaken for a promise of profit. The legal framework regulates the offer, requires disclosure and provides remedies against unlawful conduct, but it does not eliminate commercial risk. Every investment decision should therefore be made carefully and, where necessary, with advice from a qualified legal practitioner, stockbroker or financial adviser.
ABOUT THE AUTHOR
Mustapha Babalola Toheeb is a legal practitioner with interest in dispute resolution practice, capital market and taxation. He is a member of the Chartered Institute of Taxation, where he is currently working towards becoming a chartered tax practitioner. He practices in Lagos and in his leisure time, he prefers to read his history books, watch football and prepare his favourite meal. He can be reached via email-toheebmustapha15@gmail.com or Whatsapp-08106244073.
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