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Tag: BGL

  • Court rules on BGL case vs SEC Nov 27

    Justice Mohammed Idris of a Federal High Court in Lagos has fixed November 27, for ruling in the suit filed against the Securities and Exchange Commission (SEC) by BGL Group.

    In a fresh application argued on Wednesday by its counsel, Mr. Kemi Pinheiro (SAN), BGL is seeking an order to nullify the two rulings made on September 17, 2015 by Justice Mohammed Yunusa.

    Yunusa, who sat as a vacation judge, had in the said rulings vacated an interim injunction barring SEC from expelling BGL from capital market.

    The vacation judge also dismissed BGL’s application seeking to stay further proceedings in the matter.

    But in the fresh application Pinheiro is contending that as of the time that Yunusa gave the rulings, he no longer had jurisdiction.

    Pinheiro argued on Wednesday that Yunusa’s jurisdiction on the case, as a vacation judge, had ended on September 11 and maintained Yunusa had been drained of jurisdiction as of September 17 when he made the two rulings.

    He urged the new judge on the case, Justice Idris, to vacate those two orders.

    Yunusa had on September 22, when he was due to deliver a third ruling in the case, told the parties that the case file had been returned to the Chief Judge of the Federal High Court, Justice Ibrahim Auta, for re-assignment to another judge.

    At the resumed proceedings before Justice Idris last Wednesday, Pinheiro said, “Justice Yunusa was constituted as a special court. His jurisdiction to entertain cases is not at large.

    “On September 17, the purported vacation court proceeded to deliver a ruling outside of jurisdiction.

    “The question before the court is to determine whether the ruling of September 17 was legal or not, when the court vacation had ended on September 11.

    “Our application is not to seek for the appeal of what took place brother your learned brother, Yunusa, but we are urging Your Lordship to set aside every proceeding that were taken outside of jurisdiction because Justice Yunusa had been drained of jurisdiction.”

    But in opposition, counsel for SEC, Prof. Kayinsola Ajayi (SAN), described BGL’s application as an abuse of court processes, which was incurably bad and could not be remedied.

    Ajayi said there was nothing like vacation jurisdiction, adding that the only factors that could affect the right of a judge to hear a case would be whether the judge was indeed a judge, whether the subject matter was within his purview and the case fell within the territory of the court.

    He further maintained that the arguments which led to the September 17 rulings were taken prior before that date, adding that the date for ruling was chosen by the consent of the two parties.

    He accused the BGL counsel of bogging down the case during vacation, recalling that they had once said they brought an application “to frustrate the proceedings” during vacation.

    “The conduct of the plaintiffs is one that demonstrates that the court should not demonstrate discretion in their favour.

    “The plaintiffs have not come with clean hands,” Ajayi.

    After listening to the parties, Justice Idris fixed November 27, 2015 for ruling.

    BGL had in May filed the suit before Justice Saliu Sadiu to challenge its proposed expulsion from the capital market by SEC.

    The SEC had announced the expulsion of BGL from the Nigerian capital market after receiving over 40 petitions from aggrieved investors who claimed to have been defrauded by the company.

    BGL’s Group Managing Director, Albert Okumagba, was also banned from operating as a Registered Sponsored Individual with SEC.

    In its preliminary objection to the suit, SEC alleged that BGL is indebted to various capital market investors, including the Rivers State Ministry of Finance to the tune of  N5.8bn as of  June 2, 2015.

    SEC further claimed that as of December 2014, BGL had run at a loss running into over N48bn, adding that BGL had severe liquidity problems.

     

  • BGL, SEC case eroding confidence in capital market, say investors

    BGL, SEC case eroding confidence in capital market, say investors

    Some investors in the capital market whose funds are trapped in BGL Plc have decried the delay in the resolution of the case between the group and the Security and Exchange Commission (SEC).

    They said the delay in dispensation of the case at a Federal High Court sitting in Lagos is affecting them and further eroding  confidence in the market.

    The SEC had, in a public notice, suspended BGL Plc, its subsidiaries and sponsored individuals from all activities in the Nigerian capital market, following complaints by over 40 investors  against BGL.

    BGL and its subsidiaries had, through an ex parte application, obtained an order restraining the SEC from enforcing and implementing the suspension.

    The order of Justice Mohammed Idris prevented  the SEC from hearing the case brought by the 40 aggrieved group in the capital market against the BGL Group.

    Prior to this ex-parte order, the SEC had invited BGL and its subsidiaries to the Administrative Proceeding Committee (APC) hearing then scheduled for August 4 and 5, 2015.

    The SEC APC is a body established pursuant to Section 310 of the ISA for the purpose of resolving disputes in the capital market and giving opportunity for fair hearing to capital market operators and other institutions in the market who are perceived to have violated or have actually violated or threatened to violate the provisions of the ISA and the SEC rules and regulations or such operators against whom investors have lodged complaints.

    Respite came the way of the aggrieved investors when last week another judge, Justice M.N. Yunusa, vacated the ex parte orders obtained by BGL.

    Justice Yunusa, who presided over the case as vacation judge on  September 17, 2015, overturned the restraining orders issued by Justice Saliu Saidu, saying he strongly believed that BGL obtained those orders from Justice Saidu by concealing material facts.

    He equally turned down BGL’s prayer to stay proceedings in the case, pending the outcome of the SEC petition against Justice Saidu.

    By overturning the ex parte orders that had emasculated the SEC and prevented it from bringing BGL before the  APC, Justice Yunusa had given investors hope that justice was finally in sight.

    He adjourned the case to Tuesday, September 22, 2015 when he was expected to give the third ruling.

    Things, however, took a different dimention at the resumed hearing of the matter when Justice Yunusa  announced that he could no longer deliver the ruling because the case had been reassigned to another Judge by the Chief Judge of the Federal High Court.

    This would be the third time the case was reassigned. First, it was passed from Justice Saliu Saidu to Justice Mohammed Idris and then to Justice Yunusa.

    Some of the investors who spoke on condition of anonymity said the this adjournment would further delay the hearing of this matter.

    “It is important to note that in all this, it is we the investors,   who are suffering because the SEC who is statutorily empowered by the Investments and Securities Act (ISA) to protect investors and the capital market as a whole, is prevented from bringing BGL and its subsidiaries before the SEC APC so as to address the complaints brought against the Group by over 40 investors,” one of the investor said.

  • SEC objects to BGL’s suit over ‘unpaid’ N5.7b investments

    SEC objects to BGL’s suit over ‘unpaid’ N5.7b investments

    The Securities and Exchange Commission (SEC) yesterday urged the Federal High Court in Lagos to strike out a suit by BGL Plc, its subsidiaries and others over allegations that they are indebted to investors to the tune of N5.7billion.

    Some of the investors, including Rivers State government, had petitioned SEC over BGL’s alleged failure to return their investments at maturity.

    SEC, in the preliminary objection, said BGL is indebted to the investors to the tune of N5,769,993, 553.67 as at June 2.

    It added that BGL is having severe liquidity problems and has been running at a loss to the tune of over N48billion as at December 2014.

    According to SEC, BGL Asset Management Limited, contrary to its mandate, wholly transfers funds received from the investing public to BGL Plc without engaging in any form of Fund/Portfolio Management.

    But BGL obtained an order restraining SEC from “holding and or conducting any trial or hearing in respect of the alleged complaints against the plaintiffs…” pending the hearing and determination of the suit.

    The plaintiffs are BGL Plc, BGL Asset Management Limited, BGL Capital Limited, BGL Securities Limited, Mr Albert Okumagba, Chibundu Edozie, Teddy Okumakube, Loraine Awoonor-Renner, Ehime Alofoje, Joseph Ashley-Osuzoka, Andre Ewubare, Victor Obire and Nkechi Azubuike.

    They sued SEC, its Administrative Proceedings Committee (APC) and Mounir Gwarzo.

    Justice Mohammed Idris had ordered parties to maintain status quo ante bellum pending further orders.

    SEC had suspended BGL Asset, BGL Capital and BGL Securities from all capital market activities, withdrew the registration of BGL Plc as a capital market operator and directed that Okumagba should cease to be a registered Sponsored Individual with SEC.

    Dissatisfied, BGL sued SEC, challenging the suspension. The plaintiffs said the wide publicity SEC gave the suspension, including posting it on SEC’s website with worldwide access, has caused adverse effect on BGL and injured the plaintiffs in every conceivable manner.

    BGL said it is contrary to the rules of natural justice for SEC’s APC to adjudicate over the complaints which was the basis for its indictment and suspension.

    It urged the court to restrain SEC from making further media publication of the allegations of crime and unethical conduct, adding that “unless the defendants are restrained in the manner sought, no amount of monetary damages will adequately compensate the plaintiffs for the loss that continues to be incurred by them by the defendants’ conduct.”

    SEC, in the preliminary objection, is contending that the court lacks jurisdiction to entertain the suit on the ground that only the Investment and Securities Tribunal has the exclusive jurisdiction to adjudicate disputes between the commission and a capital market operator.

    Besides, the commission said the plaintiffs’ claim “is based on speculations and presumptions and has not raised any reasonable cause of action.”

    The plaintiffs’ counsel Adebowale Kamoru said he needed at least seven days to respond to SEC’s objection.

    Justice Idris adjourned to August 13 for hearing.

  • SEC suspends BGL’s firms, Okumagba, others from capital market

    SEC suspends BGL’s firms, Okumagba, others from capital market

    Securities and Exchange Commission (SEC), yesterday came down heavily on one of Nigeria’s leading investment banking groups with the suspension of the BGL Group and its subsidiaries from all capital market activities.

    In a statement,  SEC said its decisions were based on the “report of a detailed investigation into the various complaints received from investors against subsidiaries of BGL Group”. The decisions were taken by the executive management committee at its meeting on Tuesday.

    SEC had late April intervened in the operations of BGL Group Plc, suspended its board and set up an interim management board for the group. The interim management board, headed by a former president of Chartered Institute of Stockbrokers (CIS), Mr Oladipo Aina, was mandated to conduct full investigation into the operations of BGL Group. Other members of the interim board were Mr. Abubakar Ambursa, Mrs. Hafsat Rufai, Ms. Temitayo Siyanbola and Ms. Tonne Ladipo-Ajayi.

    On the basis of the investigation report, SEC yesterday announced the suspension of BGL Asset Management Limited, BGL Capital Limited and BGL Securities Limited from all capital market activities.

    The Commission also directed that all major officials and 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 last year  be suspended from performing any capital market activity.

    SEC particularly cited Mr. Albert Okumagba, the group managing director of BGL Group and directed that Okumagba, who was the president of CIS before the April sack of the board, 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.  With this directive, Okumagba, one of the most influential capital market operators, will therefore no longer be entitled to carry out capital market activities.

    Besides, the apex capital market regulator stated that it has referred what it described as “suspicious transactions” observed in the course of the investigation to the appropriate law enforcement agencies for further investigation.

    According to the statement, BGL Asset Management Limited, BGL Capital Limited and BGL Securities Limited and all individuals involved in the management of the companies have also been referred to the Administrative Proceedings Committee (APC) of SEC for further trial.

    BGL Plc is quoted on the NASD Plc, the over-the-counter (OTC) market for the trading of shares and securities of unlisted public limited liability companies. Founded in 1993 and formerly known as Banc Garanti Limited, BGL Plc commenced business as a bank holding company with the aim of acquiring distressed or underperforming institutions in the banking sector.

    It quickly built up a large portfolio of assets and earned reputation as one of the most influential investment banking firms in Nigeria. BGL Securities is the stockbroking arm of the group and it is a major dealing member of the Nigerian Stock Exchange. It is ranked variously as one of the top 20 stockbroking firms at the stock market. BGL Asset Management, a wholly owned subsidiary of BGL Plc, was incorporated in April 2007 and it deals primarily as the asset management arm of the group.

  • SEC lists BGL, Stanbic, others as 10 most expensive fund managers

    Ten mutual funds spent more than one per cent of their net asset value as expenses, according to a report on expenses of mutual funds by the Securities and Exchange Commission (SEC).

    The report on expenses ratio for the second quarter ended June 30, this year showed that only 10 mutual funds expended more than one per cent of their net assets as running costs. The report covered 51 mutual funds registered with SEC.

    The report however generally showed that the expenses of all mutual funds remained well below the 5.0 per cent ceiling set by SEC as fund managers continued to look for ways to further reduce expenses.

    According to the report, BGL Nubian Funds, managed by BGL Asset Management, has the highest expense-to-net asset ratio of 3.22 per cent. BGL Nubian Funds is an equity-based fund. Kakawa Guaranteed Income Fund, under the management of Kakawa Investment Management Limited, has the second highest ratio of 2.97 per cent.

    Anchor Fund, an equity-based fund being managed by FBN Capital Asset Management Limited, has the third highest expenses of 2.68 per cent while Lotus Halal Investment Fund, a Shari’ah-compliant ethical fund being managed by Lotus Capital, placed fourth with 1.81 per cent. Lotus Halal Investment Fund has been trading below its offer price and it has not made return to investors since the fund was floated six years ago.

    Other funds within the highest category included Stanbic IBTC Ethical Fund, with 1.63 per cent; Stanbic IBTC Nigerian Equity Fund, 1.56 per cent; FBN Capital Asset Management’s Bedrock Fund, 1.55 per cent; FSDH Asset Management Limited’s Coral Growth Fund, 1.12 per cent; and UBA Money Market Fund and Stanbic IBTC Guaranteed Investment Fund, which recorded 1.10 per cent each.

    Meanwhile, Stanbic IBTC Iman Fund, a Shari’ah-related ethical mutual fund being managed by Stanbic IBTC Asset Management, was the least expensive fund during the period with expense to net asset ratio of 0.15 per cent while UPDC Real Estate Investment Trust (UPDC Reits), being managed by FSDH Asset Management Limited, followed with 0.17 per cent.

    The report highlighted concerted efforts by fund managers to reduce expenses with a view to enhancing the attractions and returns of mutual funds. Most fund managers considerably reduced their expenses in the second quarter compared with expenses recorded in the first quarter.

    For instance, Stanbic IBTC Nigerian Equity Fund’s expenses totalled 2.61 per cent of its net assets in the first quarter while Frontier Fund, being managed by Sterling Capital Markets Limited, reduced expense ratio from 1.21 per cent in the first quarter to 0.71 per cent in the second quarter.

    Total net asset value of all mutual funds stood at N185.39 billion by the close of trading on August 22, 2014. Money market fund was the largest segment with net asset value of N60.45 billion. Equity funds and real estate funds followed with N43.97 billion and N42.2 billion respectively.

    On fund-by-fund basis, UPDC Reits, a real estate fund, was the largest mutual fund with net asset value of N28.49 billion. Stanbic IBTC Money Market Fund placed second with N27.78 billion while FBN Money Market Fund was the third largest fund with N27.43 billion.

    Mutual funds, otherwise known as collective investment schemes (CIS), are joint investment vehicles through which investors can pool funds and invest in chosen basket of securities under a professional management with a view to optimise returns and reduce risks.

    Net asset value is determined by subtracting total liabilities of a fund from its total assets. The net asset value can further be divided by the total number of units of the fund to determine the unit price.

    A mutual fund is usually categorised by the class of assets that forms the primary focus of its investments. Thus, there are equity funds, money market funds, bond funds, real estate funds, ethical funds and balanced funds, among others.

    SEC has said it would review the cost structure and expenses of mutual funds with a view to ensuring that more returns accrue to investors.

    Director, Collective Investment Scheme (CIS), Securities and Exchange Commission (SEC), Mrs Louisa Eni-Umukoro, said the commission was concerned about the expenses and costs relative to fund management.

    According to her, SEC is considering introducing a multi-fee class structure for the mutual funds alongside other measures to reduce costs.

    “We are looking at introducing a multi-fee class structure whereby the more you subscribed, the less you pay. It’s something we are going to work out with the fund managers,” Eni-Umukoro said.

    She said the commission has noticed a high expense ratio on the part of some fund managers.

    She said SEC might review downward the expense ratio ceiling of five per cent to discourage frivolous expenses by some managers.

    Eni-Umukoro said the apex capital market regulator had amended its rules to cut expenses in relation to to fund management.