Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) has reiterated its commitment to wield the big stick against any major capital market operators and companies that violate the ethics of the market or engage in activities that infringe on investors’ confidence.
Director- General, Securities and Exchange Commission (SEC), Mr Mounir Gwarzo, said the zero tolerance of the apex capital market regulator knows no size, name or colour and all operators would be held to accounts in line with extant capital market rules.
“Whoever you are, whatever your size is, when you cross the red line, the letter will be on you. So, I think that the message has been sent to everyone. In the past, it was only the smaller ones that have been dealt with but now we have shown example that whoever you are, it doesn’t matter to SEC, your size doesn’t matter and I think the few actions we have taken on big companies have sent a strong signal to the market,” Gwarzo said.
Gwarzo spoke against the background of high-profile cases that led to expulsions of many hitherto leading capital market operators and the recent launch of a major investigation into the operations of a leading quoted company.
He said the capital market remains the barometer of the economy citing the growth in the macro economy and the recovery at the Nigerian stock market.
According to him, the positive correlation between the capital market growth and the national economy underlines the importance of the capital market to the national economic development.
He noted that the steep reduction in capital market infractions in recent period was due to both the strict enforcement regime by SEC and the quality of human capital development by the Chartered Institute of Stockbrokers (CIS).
As the CIS celebrates its 25th anniversary, Gwarzo praised the founding fathers of the institute and those that have dedicated themselves to sustaining the high standards of the institute.
SEC recently indicted the Managing Director of Partnership Investment Company Plc and Partnership Securities Limited, Mr. Victor Ogiemwonyi , banning him from engaging in capital market activities and from holding directorship positions in any public company in Nigeria. The SEC also withdrew the operating licence of the companies. Also, the commission suspended the chairman of the companies-Mr. Henry Omoragbon from engaging in capital market activities in the Nigerian capital market for a period of five years.
Ogiemwonyi and his companies allegedly engaged in unauthorised sale of clients’ shares, failure and refusal to resolve clients’ complaints, performance of a capital market function without registration, non-compliance with the Code of Corporate Governance of the Commission, filing of false and misleading information and non-compliance with the Commission’s rules relating to assets-mix ratio.
Ogiemwonyi was a fellow and former council member of the CIS, former council member of the Nigerian Stock Exchange (NSE), former president of the Association of Issuing Houses of Nigeria (AIHN), member of the Capital Market Masterplan Implementation Committee and member of the board of the NASD Plc.
SEC had earlier banned Okumagba and Edozie and their companies, BGL Assets Management Limited and BGL Securities Limited from ever participating in the Nigerian capital market. Both Okumagba and Edozie were also banned for life from holding office in any public company in Nigeria. BGL Group was a leading investment company.
The cancellation of the licences of the two companies and the life ban on Okumagba and Edozie were the highpoints of the summary of the decision of the SEC Administrative Proceedings Committee (APC) in the matter of APC/1/2015: Rivers State Ministry of Finance & 31 Others V. BGL Plc & 31 Others.
In a circular on the final decision of the SEC APC, SEC stated that the companies and their key executives and officials breached capital market rules and engaged in acts that led to a loss of N5.77 billion to 32 innocent investors.