By InvestAdvocate
Lagos (INVESTADVOCATE)- The Securities and Exchange Commission (SEC) said on Sunday BGL Group, its subsidiaries and sponsored individuals remains suspended from all capital market activities
The Commission in a notice it posted on its website dated September 19, 2015 thus read: “This is to inform the general public that on September 17th, 2015, the Federal High Court in Suit No. FHC/L/CS/767/15; BGL Plc & Ors Vs Securities and Exchange Commission, discharged the Ex-Parte order obtained by BGL Plc and its subsidiaries on the 27th of May 2015. “In view of the Court’s ruling, BGL, its subsidiaries and sponsored individuals remain suspended from operating in the Nigerian capital market.
The notice added that “the Nigerian Stock Exchange (NSE), Central Securities Clearing System CSCS, Financial Market Dealers Quotation (FMDQ) Plc, Nigeria Association of Securities Dealers (NASD) Plc and the general public should further note that the directives of the Commission in its public notice dated the 21st of May 2015 still subsists.”
SEC is empowered under Sections 13(n), 45, 303 of the Investments and Securities Act (ISA) 2007 and Rule 598 of its Rules and Regulation to protect the integrity of the capital market against all forms of abuses by investigating and sanctioning persons who violate the Provisions of the Act and rules and Regulation thereto.
The nations apex market regulator says it wishes to assure all stakeholders and the general public that it is committed to protecting investors and the capital market and to this end will ensure that persons who violate the provisions of the Investment and Securities Act and the Rules and Regulations made pursuant thereto would be sanctioned appropriately.
On June 25, 2015 SEC said received over 40 letters of investor complaints against BGL Group Plc alleging indebtedness to the tune of about N5.8 billion. Investigations were conducted and all-parties meetings were arranged by SEC during which repayment agreements were struck between BGL and some of the affected investors. Unfortunately, BGL continued reneging on promises to restitute investors.
Backed by a court order from the Investments and Securities Tribunal (IST), SEC set up a 7-man Interim Management Team (IMT) for BGL Group. This was a necessary, well-considered action with the sole objective of protecting investors while a more detailed forensic audit was conducted to determine the financial health of the companies within the BGL Group and the nature/extent of infractions committed by the BGL management.
From the preliminary report of the forensic auditors, it was revealed, among other facts, that indeed BGL Group was in a critical financial state in which:
- The Group’s management had progressively eroded its shareholders’ funds through losses sustained over a 5-year period totaling about N48 billion as at December 31, 2014.
- Billions of naira in investors’ funds were put at extreme risk through questionable investments by the BGL management in some illiquid, unlisted companies’ securities; one of which has been declared bankrupt.
- The Group has significant liquidity challenges making it unable to meet its responsibilities towards clients and investors as evidenced by over N11 billion in unpaid matured funds to investors.
