ERHC Energy Inc (ERHE)

[rocky822]

This is what I've found.

First, any shares sold by the COB would be considered "restricted shares":

"Control securities are those held by an affiliate of the issuing company. An affiliate is a person, such as a director or large shareholder, in a relationship of control with the issuer. Control means the power to direct the management and policies of the company in question, whether through the ownership of voting securities, by contract, or otherwise. If you buy securities from a controlling person or "affiliate," you take restricted securities, even if they were not restricted in the affiliate's hands."

I can't find anything on the SEC website re: private sale of restricted shares but did find these.

"Many also don't realize that, with the exception of subsection (k), Rule 144 is used only for "public sales." Where the owner of a controlling block of stock in a public company negotiates a private sale of his entire block with a buyer, the Rule does not come into play. In that event the buyer, who must have access to adequate information about the issuer and qualify as a "sophisticated investor," would receive restricted shares, since they would be acquired in a transaction not involving a public offering.

http://www.feinberglawgroup.com/Rule144.htm

And, this:

"Selling restricted securities in a private transaction also has several advantages:

All Securities Are Welcome. Other strategies designed to monetize the value of restricted stock holdings require liquid, marginable securities. No minimum share price or trading characteristics are required to complete a private sale.
Liquidity When You Need It. If you use the Restricted Securities Trading Network (RSTN) to sell your restricted securities, the net proceeds will be sent to the account of your choice immediately upon closing.
Diversification As You Want It. Reduce your risk by diversifying out of a concentrated position. Use the proceeds to diversify through public markets, capitalize a private enterprise, or pay down personal or corporate debt. We recommend that you always speak with your financial or tax advisor before contacting RSP.
"Few Restrictions. In a private sale, the seller is not subject to Rule 144 trading restrictions, such as the one-year holding period, volume limits, reporting requirements or filing requirements."
Potential For Removing Contractual Restrictions. In some cases, we can assist in negotiating the removal of contractual restrictions, such as lock-up periods.
Competitive Bidding. Because the members of the RSTN seek to purchase restricted securities, we can usually generate highly competitive bids that meet sellers' expectations, while offering profit potential for buyers."

http://www.restrictedsecurities.net/sellers/index.htm

But, I DO think that although there wouldn't have to be reporting from the seller, I think the buyers would have to report that they now controlled (or increased ownership) x%.

Tender Offers
The Securities Exchange Act requires disclosure of important information by anyone seeking to acquire more than 5 percent of a company's securities by direct purchase or tender offer. Such an offer often is extended in an effort to gain control of the company. As with the proxy rules, this allows shareholders to make informed decisions on these critical corporate events.

http://sec.gov/about/laws.shtml#secact1933