Shareholders’ groups laud SEC’s decision to ban BGL’s boss from market activities

Shareholders’ groups have lauded the Securities and Exchange Commission’s decision to ban the Managing Director of BGL Securities from operating in the market for 20 years, saying the action would help restore confidence in the market.

Specifically, the President, Independent Shareholders Association of Nigeria (1SAN), sir Sunny Nwosu explained that the decision would compel other dealing members that their operations does not conform with market regulations to start operating with high level of corporate governance.

He, however, urged the regulators to ensure that decision was not based on ‘personality clash’ rather; it must be on proven infractions.

“If anyone fails to follow the rule would be prone to this kind of problem. It would go a long way to bring those that does not toll the way of rule of law to begin to comply with high level of corporate governance,” he said.

Also reacting to the issue, the President, Rennaissance Shareholders Association, Timothy Olufemi described the action as a ‘good Omen’.

He added that it would serve as deterrent to others and build confidence in the market.

“The sanction on Managing Director of. BGL is good for the market. This will serve as deterrent to others.

“It would also build confidence in the market. It is a good Omen. We love the zero tolerant for Infraction in the market,” he added.

The President Constance Shareholders Association of Nigeria, Shehu Mallam Mikail National pointed out that the action has showed that SEC is transparence in making sure that accountability should be adhered to by all practising bodies when it comes to issues of the capital market.

“It is nice as he has been banned for the next twenty years not the company. That shows that SEC is been transparence in making sure accountability should be adhered to by all practicing bodies when it comes to issues of Capital markets.

“Now both foreign and local investors will be somehow scared about trustworthiness of our stock brokers but with present policies that guide the rules in operating on the floor of exchange it will impact positively.”
The SEC had last week banned Okumagba and   his deputy, Chibundu Edozie, from capital market activities for 20 years due to complaints by investors against Okumagba and his company over failure, refusal and or/neglect to liquidate their investments in both the Guaranteed Consolidated dated notes and Guaranteed Premium Notes, among others.

The statement, which was contained on a circular posted on the commission’s web site was entitled ‘SEC Administrative Proceedings Committee (APC) gives its decision on BGL Securities Ltd and 22 Others’.

The commission also ordered Okumugba’s companies to refund investors over two billion naira.

The circular pointed out that the commission in a bid to obtain justice for the complainants and grant all parties fair hearing, the matter was presented before its APC, which sat on Feb. 6, 2016.

“During the proceedings testimonies and documentary evidence were tendered by various parties and upon conclusion of the proceedings, its APC arrived at a decision which has been approved by the relevant authority,” it stated.

The APC decided that by their actions and/or omissions   BGL Securities Ltd, BGL Asset Management Ltd, Okumagba, Edozie and 22nd respondents engaged in acts capable of adversely affecting investors confidence in the capital market.

It added that the APC decided that the registration of BGL Securities and BGL Assets Management be cancelled, while Okumagba and Edozien banned from capital market operations for a period of 20 years.

It stated further that the two companies would also pay a fine of N25 million for breaching Rule 1(iii) of the Code of Conduct for capital market operators.

“Other than Okumagba and Edozie,  Peter Adebola and Ashley Osuzoka have  also been banned for five years and four years respectively,” it added.

The APC apart from the ban placed on them and some monetary fines directed the companies to refund N24.03 million to the National Open University Staff Cooperative Multipurpose Society.

It also directed the companies to pay Delta State Ministry of Finance N1.88 billion; Azort Nigeria N204.83 million; Prof Ojuah Umunnakwe the sum of N10.97 million; N3.04 million to Orsule Awase and N10.74 million to Mahmoud Usman.