By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-Nigeria’s apex capital market regulator, the Securities and Exchange Commission (SEC) has given Wema Bank Plc up till July 16, 2015 to pay over N70 million for negligence.

Following our earlier report on June 17, 2015 entitled” SEC Order’s Wema Bank to Pay over N70 Million for Negligence” a letter obtained by InvestAdvocate addressed to the managing director (MD) Wema Bank with reference number SEC/LZO/L&I/INVG/1754 signed by Omotayo Adeleke on behalf of the director general (DG) and dated May 21, 2015 shows that the Commission established that a complainant WEHSAC Farms Ltd subscribed to 7.0 million units of Daar Communication shares in the 2008 public offer which the company never got.

SEC had ordered Wema Bank to refund the sum of N35 Million with interest calculated at the current Monetary Policy Rate (MPR) plus five (5) percent from the date of allotment in 2008 till the date the compliant was lodged in the Commission on October 14, 2014 amounting to over N70 Million.

Wema Bank had on May 27, 2015 written SEC challenging this decision ordering the bank to pay the sum of N35 Million with interest calculated at the current Monetary Policy Rate (MPR) plus five (5) percent from the date of allotment in 2008 till the date the compliant was lodged in the Commission on October 14, 2014 amounting to over N70 Million.

Parts of the letter entitled “RE: COMPLAINT ON NON PURCHASE OF 7,000,000 UNITS OF DAAR COMMUNICATION PLC SHARES BY WEMA ASSET MANAGEMENT LTD IFO WEHSAC FARMS LTD” signed by Valentine Kunuji, Legal Services Department and Johnson Lebile, head, Legal Services Department reads thus: “First, we hereby place on record our utter surprise at the sudden decision of the Commission on the above subject. By all known indices, the said decision is motivated by bias, hasty and constitutes a gross contravention of section 36 (1) of the 1999 constitution and therefore unacceptable to the bank.”

It would be recalled that the resolution at the end of the all parties meeting of March 17, 2015 was “that the Commission would request the bank to furnish additional documents to ensure a fair and equitable adjudication of the dispute.

It is therefore curious that the Commission in a volte face abandoned its own resolution and refused to wait for all the evidence to come in before hurriedly coming to a decision on the matter.

We submit that the unduly antagonistic and prejudiced disposition of the Commission even at the said all parties meeting already set the tone for the outcome of its adjudication.”

Wema Bank said it’s grossly dissatisfied with the decision of SEC and at the same unacceptable to them. “Kindly therefore be notified of the bank’s resolve to challenge same at the appropriate quarters. This notice is given in satisfaction of the requirement of section 289 of the Investment and Securities Act 2007,” the bank added.

In a swift response to this by SEC, a letter dated July 1, 2015 with reference number SEC/LZO/LAI/INVG/2292 signed by Omotayo Adeleke on behalf of the DG SEC addressed to the MD of Wema Bank, the Commission said it viewed the bank’s allegations in the said response as a further attempt to pervert cause of justice in the matter.

SEC had said that Wema Bank was informed to come with relevant documents to backup their case in the March 17, 2015 all parties meeting which legal representatives to the bank refused to tender even when they had them.

When contacted, on thethe SEC’s decision, BROADSTREET PARTNERSHIP, managing consultant. Iyaniwura. Adebisi, a financial and commercial lawyer and clients to WEHSAC Farms confirmed that at the March 17, 2015 all parties meeting at the instance of SEC, Wema Bank representative refused to tender documents to backup their case even when they had them. “Their legal representatives refused to tender documents which SEC requested and they had them; but simply refused to do so,” the WEHSAC Farms attorney said.

Parts of SEC July 1 letter to Wema Bank as regards the issue reads thus: “ It is noteworthy that your evasiveness and suppression of facts in refusing to respond to the Commission’s questions during the all parties meeting especially as regards the extent of your liability to your acquired subsidiary (Wema Asset Management  Ltd) was an indication of your awareness of their negligence in handling the complainant’s transaction and the possible sanction attracted for which you have resorted to disrespect and attempted to frustrate the Commission’s efforts in ensuring justice.

Our decision in this matter was premised on the fact that all registered operators as professionals in the capital market are expected to exhibit utmost good faith in dealing with their clients to forestall loss on their investment. Your subsidiary’s nonchalant behaviour towards rectifying on obvious mistake made by them in carrying out the complainant’s transaction was a display of bad faith which has caused the investor to suffer in the value of his investment. Therefore, your claim of restoring the complainant “swiftly” six (6) years after the public offer is untenable.

You will recall that you were expected to come along with all relevant documents that would assist your case as stated clearly by the Commission in the letter inviting you to all parties meeting. Your refusal to avail us with copies of documents relied on in the presentation of your case even when you had them was an offence in contravention of Section 13 (r) of the Investment and Securities Act which in itself is punishable.”

According to SEC, it obtained the document from other parties immediately after the meeting to enable it move on with the case; affirming that the decision was taken after careful perusal of all documents and evidences of parties in the case.

The Commission reminded Wema Bank that as Apex Capital Market Regulator in the Nigerian Capital market (NCM) it’s charged with the primary duty of regulating and developing the capital market and as such vested with the powers to deliberate and take decisions on complaints arising from transactions thereon. “Therefore, your bank is bound by our decision by reason of the acquisition of Wema Asset Management Ltd,” SEC added.

“Consequently, our directive that you refund the sum of N35, 000,000.00 (Thirty Five Million Naira) deposited for shares to the complainant and take possession of the shares still stands and this letter serves as final reminder for you to revert to the Commission with evidence of compliance with our directives latest by 16 July, 2015, failing which you would be sanctioned,” SEC affirmed.

As at the time of filing in this report, all efforts to get the response of Wema Bank  for two (2) days did not materialise as Onome Odili, head, brand management & marketing communications of the bank only responded to text messages sent to her that she has no idea and will revert once she get details, “ I have no idea. I will revert once I get details. Thank you.” The message reads.

She also responded to a phone call to her insisting she has no information yet and would revert as soon as she has her details.