25 May 2015, Lagos – Anxiety and fears have gripped some capital market operators who are fond of unethical practices and have swindled investors following the decision of the Securities and Exchange Commission (SEC) to suspend BGL Group Plc from all capital market operations.
BGL, which is one of the top investment banks operating in the market, has Mr. Albert Okumagba as group managing director. Okumagba is also the president of Chartered Institute of Stockbrokers (CIS), the professional body for all stockbrokers in Nigeria.
However, SEC last week suspended BGL from operating in the market. The commission also said that Okumagba should cease to be a registered Sponsored Individual with the commission following the withdrawal of the registration of BGL Plc as a capital market operator.
According to the commission, the decision to suspend BGL was taken after the commission’s Executive Management Committee meeting held on May 19, 2015, where it considered the report of a detailed investigation into the various complaints received from investors against subsidiaries of BGL Group.
SEC directed that “BGL Asset Management Limited, BGL Capital Limited and BGL Securities Limited be suspended from all capital market activities all Sponsored Individuals of BGL Asset Management Limited, BGL Capital Limited and BGL Securities Limited whose particulars are contained in the Commission’s record as at December 2014 be suspended from performing any capital market activity.”
The commission noted that “all suspicious transactions observed in the course of the investigation have been referred to the appropriate law enforcement agencies for further investigation; and BGL Asset Management Limited, BGL Capital Limited and BGL Securities Limited and all individuals involved in the management of the said companies have been referred to the SEC Administrative Proceedings Committee (APC) which will give all parties to the cases a fair hearing.”
THISDAY checks showed that operators who have records of unethical practices never expected the suspension of BGL given its position in the market. Such operators are now highly apprehensive as SEC wield the big stick.
“I can tell you that operators who have shady records are trying to rectify them before SEC’s hammer falls on them. With what has happened to BGL and Okumagba, it is obvious that the cleansing in the market has begun and everyone is trying to be very cations because if Okumagba, who is CIS president can be suspended, nobody can escape. The only solution is to remain clean,” a stockbroker told THISDAY at the weekend.
Meanwhile, a leader of a shareholders association, SEC’s action has encouraged investors to take dig up past cases against stockbroking firms that were not thoroughly treated by the commission.
“We can see that SEC can now bite and this is highly encouraging because many of us lost significant part of investments to dubious market operators. While we complained in some of the cases, we did not receive any good result because of the shabby way they were handled by the commission. With what has happened, we will have to bring up some of those cases against such operators,” he said.
Before the suspension of BGL, SEC had last month appointed and interim management to run company following complaints by investors. The interim management was mandated to conduct a forensic audit of the company’s operations among others.