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Tag: SEC

  • Shareholders vow to resist SEC’s treasury for unclaimed dividends

    Major retail shareholders’ groups yesterday rose against the plan by the Securities and Exchange Commission (SEC) to establish a Nigerian Capital Market Development Fund (NCMDF) to take custody of unclaimed dividends of 12 years and above.

    SEC in a circular sent to capital market stakeholders on Tuesday, had called for a consideration of a new rule that will set up the NCMDF which will take custody of all unclaimed dividends of 12 years and above.

    Under the extant laws, unclaimed dividends will remain available for collection by beneficiaries up till 12 years when they become statute-barred and subsequently return to the companies that paid the dividends.

    Shareholders’ leaders across the groups said they would resist the transfer of statute-barred unclaimed dividends to any NCMDF, describing the plan as a wrong move and a volte face from the recent campaign by SEC for the removal of the 12-year limit to enable shareholders and their beneficiaries be able to collect their dividends at any time.

    National coordinator, Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, said his group would mobilise shareholders to resist what he described as “very offensive” attempt to take their private monies.

    “I think it’s wrong, we will not agree and we will not allow that to happen,” Nwosu told The Nation.

    He said SEC and other regulators have sufficient funds and avenues to mobilise resources to perform their statutory roles of market development, noting that dividends belong to shareholders and the paying companies.

    Shareholders’ activist and one of the co-founders of Nigeria Shareholders Solidarity Association (NSSA), Alhaji Gbadebo Olatokunbo, said the plan would lead to corruption and discourage investors from the domestic market.

    According to him, SEC and other stakeholders should focus more on solving issues surrounding unclaimed dividend rather than looking for ways to start once again on how to acquire what does not belong to them under the guise of regulations.

    “Unclaimed dividends belong to shareholders who are the owners of companies and its going back to the companies after 12 years is legitimate. We respectfully call on the Federal Government to urgently call the regulatory agencies to order, before they add more damage to our already sick economy,” Olatokunbo said.

    President, Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr. Faruk Umar, however described the plan by SEC as a healthy development noting that the trust fund would discourage sharp practices around the unclaimed dividends.

    “The truth of the matter is that bulk of the unclaimed dividend that is more than 12 years belongs to people who are dead, multiple applicants who do not have bank account in their names, or small amounts of money that is not worth claiming. Someone that has not claimed his or her dividend in 12 years is unlikely to do so now. So, the Trust Fund should be established as this will discourage people from benefitting from the unclaimed dividend,” Umar said.

    According to him, with the anti-corruption stance of President Muhammadu Buhari’s government, and with the kind of integrity and transparency being exhibited by the current Director General of SEC, Mr Mounir Gwarzo, retails shareholders would support the establishment of the Fund this time around.

    In his remarks, coordinator, Constance Shareholders Association of Nigeria, Mallam Shehu Mikhail, said the existing rule on return of statute –barred dividends to companies should be retained.

    He criticized the plan by SEC for lack of details on benefits of such initiative to shareholders and the quoted companies.

  • SEC mulls special trust fund for unclaimed dividends

    Securities and Exchange Commission (SEC) yesterday launched a plan to establish a special purpose vehicle (SPV) for unclaimed dividends of more than 12 years. SEC estimates unclaimed dividends to be about N80 billion.

    The plan is a volte face from recent position by SEC that the provision of the Companies and Allied Matters Act (CAMA), which limits the lifespan of dividend be amended to ensure shareholders or their beneficiaries could claim their dividend at any time.

    In a circular sent to capital market stakeholders yesterday, the apex capital market regulator called for a consideration of a new rule that will set up the Nigerian Capital Market Development Fund (NCMDF) which will take custody of all unclaimed dividends of 12 years and above.

    Under the extant laws, unclaimed dividends will remain available for collection by beneficiaries up till 12 years when they become statute-barred and subsequently return to the companies that paid the dividends.

    The new rule seeks to change the return of the unclaimed dividends to companies that issued the dividends.

    According to SEC’s proposed “rule on application of 12 years and above unclaimed dividends”, companies and registrars in custody of dividends which remain unclaimed by shareholders 12 years after the date of declaration or subsequently attain the 12 years threshold shall upon the coming into effect of this rule transfer such money into the Nigerian Capital Market Development Fund (NCMDF).

    “All companies and registrars shall not later than 30 days after the end of every calendar year forward to the Commission a report of unclaimed dividends in their custody, which shall specify compliance with Sub Rule (1) of this Rule. Companies shall disclose details of compliance with this Rule in their annual reports,” SEC stated.

    The apex regulator stated that it relied on provisions of Section 313(1)(n) of the Investments and Securities Act (ISA) 2007 in deciding on the rule. Section 313 provides SEC with powers to make rules for the orderly governance of the capital market.

    The proposed new rule will undergo a two-week stakeholders’ review period, after which the Commission will decide on its next move in the rule-making process.

    Securities and Exchange Commission (SEC) Director-General, Mr. Mounir Gwarzo,  recently said there was need to amend some laws on the capital market and corporate affairs in order to attract and retain investors’ to the capital market.

    He noted that the provision in CAMA that limits dividend lifespan to 12 years, after which it becomes statute-barred and cannot be claimed, should be amended to ensure that investors can claim their dividend at any time whatsoever.

    “We don’t think that is right, the international best practice is that dividend must be in perpetuity. Once you can supply evidence that it is yours, that person should be able to claim it. The lacuna is a provision of the law and we are partnering with the parliament to see that such laws are amended and we had an excellent collaboration with them,” Gwarzo said.

  • SEC, NSE to go after indicted companies’ directors

    SEC, NSE to go after indicted companies’ directors

    The Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) are to sanction indicted companies’ directors, including seizing their assets.

    In what appeared to be a renewed push in line with the  government’s anti-corruption campaign, sources said the capital market authorities would henceforth go after directors of companies that abused their offices and took advantage of their positions to undermine corporate performance.

    Interim report by the Central Bank of Nigeria (CBN)-appointed new board for a quoted bank indicted the sacked directors of the bank of corporate governance failures, resulting in near collapse of the bank, which led to the apex bank’s intervention.

    Also, the Supreme Court recently ordered three former managing directors of three defunct quoted banks – Mr Okey Nwosu of Finbank Plc, Dr. Erastus Akingbola of Intercontinental Bank and Mr Francis Atuche of Bank PHB-to stand trial for alleged fraud. Akingbola was accused of stealing N47.1 billion while Atuche and Nwosu were accused of stealing N25.7 billion and N18 billion, totalling N90 billion.

    Regulatory sources said SEC and NSE would adopt any indictment against the directors by applying capital market laws, in addition to any penalty the non-capital market enforcement jurisdictions might have imposed in their indictments.

    “In the event of an indictment by other regulatory agencies, the Exchange will adopt such indictment and will not undertake its own separate investigation,” a management source at the NSE had told The Nation.

    The source noted that companies listed on the Exchange are required to comply with the SEC’s Code of Corporate Governance for Public Companies in Nigeria, which empowers SEC to enforce corporate governance rule, including imposition of penalties on directors for breach of the code.

    Investors have lost more than N3 billion in market value in the latest takeover of a quoted bank by the CBN on the allegation of corporate abuses and mismanagement. Similar takeover of Intercontinental Bank, Bank PHB and Finbank had led to massive losses for investors. CBN’s takeover of allegedly poorly run banks has been a major disruption and source of losses for investors. Within eight days of the takeover of Bank PHB and others, investors in banking stocks had lost N329 billion, which also contributed to the long-running recession at the stock market.

    The Investment and Securities Act (ISA) empowers SEC to seize the assets of persons and institutions that undermine the integrity of the capital market, abuse their offices, provide false or misleading information and act in a way that willfully undermine corporate performance and investors’ trust.

    The ISA empowers SEC to “in furtherance of its role of protecting the integrity of the securities market, seek judicial order to freeze the assets (including bank accounts) of any person whose assets were derived from the violation of this Act, or any securities law or regulation in Nigeria or other jurisdictions”.

    The ISA vested SEC with the responsibilities and powers to “act in the public interest having regard to the protection of investors and the maintenance of fair and orderly markets” as well as to “protect the in0tegrity of the securities market against all forms of abuses including insider dealing”.

    The Act also empowers SEC to “call for information from and inspect, conduct inquiries and audit of securities exchanges, capital market operators, collective investment schemes and all other regulated entities”.

  • SEC seeks open lifespan for dividend claim

    •Urges incentives for listing Securities and Exchange

    Securitis and Exchange Commission (SEC), Nigeria’s apex capital market regulator, has urged the National Assembly to amend the provision of the Companies and Allied Matters Act (CAMA), which limits the lifespan of dividends to ensure that shareholders or their beneficiaries could claim their dividends at any point in time. SEC estimates unclaimed dividends at over N80 billion.

    Director-General, Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, said there was need to amend some laws on the capital market and corporate affairs in order to attract investors’ to the capital market and retain them.

    He noted that the provision in CAMA that limits dividend lifespan to 12 years, after which it becomes statute-barred and cannot be claimed, should be amended to ensure that investors can claim their dividend at any time whatsoever.

    “We don’t think that is right, the international best practice is that dividend must be in perpetuity. Once you can supply evidence that it is yours, that person should be able to claim it. The lacuna is a provision of the law and we are partnering the parliament to see that such laws are amended and we had an excellent collaboration with them,” Gwarzo said.

    He also canvassed incentives that will encourage companies doing business in Nigeria to list their shares on the Nigerian stock market.

    “We think companies should be listed on our exchange. We are not advocating that it should be mandatory, but we feel the companies should be given some incentives for them to list. We don’t think it is right for foreign companies to be listed in their home countries and then come here and spend five, 10 years and not be listed. Getting more companies listed will make the marker deeper, and these are some of the initiatives we are pursuing this year,” Gwarzo said.

    During an advocacy visit to the Federal Radio Corporation of Nigeria (FRCN), Gwarzo expressed his determination to raise the participation of retail investors in the Nigerian Capital market, noting that it is one of the critical ways of deepening the market.

    He pointed out that the dominance of the market by foreign investors is one of the reasons why the market is not as deep as it ought to be.

    According to him, “raising the level of participation of retail investors in the market is the only way we can maintain the strength of the market as the dominance of the market by foreign investor is one of the reasons why the market is so susceptible to fluctuations.”

    He added that SEC understands the need to upscale the participation of the retail investors in the market and that is why it is addressing some of their concerns.

    He outlined that in order to achieve increased retail participation, the Commission has embarked on various initiatives such as recapitalisation, e-dividend registration and the direct cash settlement that ensure that when shares are sold, the investor gets the proceeds directly in his bank account.

    “We are urging Nigerians to go and register to be able to get their dividends electronically. Once we get through with the e-dividend thing, we will be able to deal with other issues in the market. The entire market has commenced direct cash settlement. The era when shares will be sold and the proceeds will be given to the broker, who will then pay the client, is over. What is obtainable now is that once the shares of an individual are sold, the net proceed is paid directly into his bank account,” Gwarzo said.

  • Only 2% of Nigerians invest in stock market, says SEC

    Only 2% of Nigerians invest in stock market, says SEC

    Securities and Exchange Commission (SEC) has said only two per cent of Nigerians, about 3.4 million, are investing in the stock market, but the ongoing implementation of the capital market master plan could increase such participation to four per cent over the next 10 years.

    Securities and Exchange Commission (SEC) Director-General, Mounir Gwarzo, said the successful implementation of the master plan is necessary to attract retail investors to the market.

    He outlined that since assumption of office, his administration decided to implement the plan that the entire market prepared and that is why every year the SEC comes up with some initiatives that the market can drive.

    During a visit to the management of Nigeria Television Authority (NTA) in Abuja, Gwarzo listed some of the achievements in implementing the master plan to include recapitalisation, direct cash settlement, e-dividend, national investors protection fund (NIPF), and corporate governance scorecard among others.

    He emphasised that the only way to attract retail investors back to the market is to ensure that concrete steps are taken to adequately address their concerns, especially the issue of unclaimed dividend.

    “The issue of unclaimed dividends, which according to our records is in excess of N80billion, will also be a thing of the past. These unclaimed dividends came about from dividends of small stakeholders like you and me and we need to ensure that they are claimed,” he said.

  • Economics students visit CBN, SEC on excursion

    Students of the Department of Economics in the Faculty of Social Sciences of the Usmanu Danfodiyo University, Sokoto (UDUS), have gone on excursion to Abuja.

    The students under the aegis of Nigerian Economics Students’ Association (NESA) visited the Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC).

    The 32 students, who undertook the trip, were lodged at Masi Hotels and Suites Ltd in Wumba Apo. They were accompanied by some of their lecturers, including Mallam M.B. Achida and Mallam Audu Bello.

    At the CBN, the students were received by some officials. At the conference room, Muhammad Muhammad, an official, spoke on Naira depreciation and CBN’s strategy in managing foreign exchange flows.

    The students described the lecture as “interactive” and “educative”, saying it helped them to appreciate their monetary policy course.

    After the session, the students were conducted round the various CBN departments. They were taken to the CBN gallery, where old currency samples, such as cowries, timbers and coins, were on display. They were also taught how they could detect fake currencies.

    At SEC office, the students met with the Deputy Director for Investigation, Abubakar Ambursa, Head of Enforcement, Bello Gwamba,  and Zayyanu Bandiya, who are all alumni of UDUS.

    The students were tutored on capital market, functions of SEC, its vision and its organisational team structure. The session was conducted by Mrs Olayeni Johnson.

    The students were given books and compact discs (CDs) for further reading on the activities of the commission. The students left for the University of Abuja (UNIABUJA) where they visited the Department of Economics on the Gwagalada campus. They had interactive session with lecturers and students before leaving for Sokoto.

    Some of the participants described the trip as educative, saying they would be willing to go again in the coming session.

  • SEC seeks media’s collaboration on master plan

    SEC seeks media’s collaboration on master plan

    The Securities and Exchange Commission (SEC) has sought the collaboration of media organizations to ensure effective implementation of the Capital Market 10 Year Master Plan.

    The Commission’s Director General Mounir Gwarzo made the appeal yesterday during a meeting with Management of Nigeria Television Authority (NTA), in Abuja.

    The DG said a successful implementation of the plan is necessary to attract retail investors to the market, address some of the challenges that Nigeria’s Capital market faced during the global capital market crash that occurred in 2008-2010 and also raise the standard of the market.

    Gwarzo said: The market went down and a lot of investors lost money in this market and sometimes two years after, the Capital Market Committee (CMC) felt there was a need to come together and prepare a document that will be able to address some of these challenges

    “You also recall that in the 90s you had the Asian crisis where a lot of stock markets especially within the Asian countries went down and a few countries within the region, Asia and Malaysia prepared a very robust Master Plan. Malaysia had a Master Plan from 2001 and they religiously implemented their Master Plan and after the completion of the 10 year Master Plan the market was able to grow in terms of recapitalisation of the Market, new products, more listings, quality of operators in the market. They were also able to address a lot of management issues at that time.

    The DG noted that since the new Management came on board, they decided to implement the plan that the entire market prepared and that is why every year the SEC comes up with some initiatives that the market can drive.

    Gwarzo listed some of the recorded achievements in implementing the Master Plan to include Recapitalisation, Direct Cash Settlement, E-Dividend, National Investors Protection Fund (NIPF) and Corporate Governance Scorecard among others.

     

  • SEC woos NASS on Master Plan

    SEC woos NASS on Master Plan

    The Securities and Exchange Commission (SEC) has called on the National Assembly  to remove legal impediments hampering the implementation of the capital market master plan.

    Speaking at the stakeholders forum on realising the potentials of the Nigerian economy through proactive capital market legislation co-hosted by the Capital Market Committees of both the Senate and House of Representatives in Abuja, the Director General of the SEC  Munir Gwazo implored the National Assembly to play a critical role in tackling identified legal impediments to master plan.

    He said SEC is taking a proactive step to compile a comprehensive document detailing all of the amendments needed to make the Master Plan implementation a success.

    Gwarzo identified some of the impediments to include Jurisdictional conflict between the Inv estments and Securities  Tribunal and the Federal High Courts Specifically Section 274 of ISA which grants IST EXCLUSIVE jurisdiction over capital market disputes vs Section 251 (1p,q,r) of the 1999 Constitution of Nigeria which gives High Courts jurisdiction over executive or administrative actions of SEC. To address this impediment to the actualization of the master plan, Gwarzo appealed to the National Assembly to  Include  the  IST  under Section 6 (5) of the Constitution and craft “legislation to prescribe the adoption of “Reasonableness test” in conducting judicial review in contrast to the “Correctness Test” as well as make the IST a special Division of the Federal High Court.

  • SEC woos NASS to Remove Impediments to Master Plan

    SEC woos NASS to Remove Impediments to Master Plan

    The Securities and Exchange Commission (SEC) has cried to the National Assembly for help to remove legal impediments hampering the implementation of the capital market master plan.

    Speaking at the stakeholders forum on realizing the potentials of the Nigerian economy through proactive capital market legislation co-hosted by the Capital Market Committees of both the Senate and House of Representatives in Abuja, the Director General of the SEC Mr. Munir Gwazo implored the National Assembly to play a critical role in tackling identified legal impediments to master plan.

    The SEC he said is taking a proactive step to compile a comprehensive document detailing all of the amendments needed to make the Master Plan implementation a success.

    Gwarzo identified some of the impediments to include Jurisdictional conflict between the Investments and Securities Tribunal and the Federal High Courts

    Specifically Section 274 of ISA which grants IST EXCLUSIVE jurisdiction over capital market disputes vs Section 251 (1p,q,r) of the 1999 Constitution of Nigeria which gives High Courts jurisdiction over executive or administrative actions of SEC. To address this impediment to the actualization of the master plan, Gwarzo appealed to the National Assembly to Include the IST under Section 6(5) of the Constitution and craft “legislation to prescribe the adoption of “Reasonableness test” in conducting judicial review in contrast to the “Correctness Test” as well as make the IST a special Division of the Federal High Court.

    The National Assembly was urged to amend the relevant sections of the Land Use Act to resolve property/land title allocation and transfer issues to facilitate securitization because “Various Sections of the Land Use Act inhibit the development of the capital market. Particularly, Sections 21 & 22 negatively impact transfer of possession and foreclosures which by implication inhibit the takeoff of mortgage-backed securities.”

    The SEC is also demanding for an amendment of Section 22 of Companies and Allied Matters Act (CAMA) to innovatively allow crowd funding of private companies. According to the SEC Director General “Section 22 of CAMA on crowd funding limits members of a private company to 50 while also restricting its transfer of shares.

    Gwarzo stated that “a robust legal and regulatory framework is a necessary condition for the actualization of our master plan aspirations.”

    In his speech, Chairman, Senate Committee on Capital Market and Institutions Senator Isiaka Adeleke said the National Assembly is keenly aware of the dwindling fortunes of the Capital Market and by extension the economy but that as a parliament they “strongly believe that, the downward slide in Nigeria’s economy, provides the best opportunity for major Stakeholders to begin to return the economy to vibrancy.”

    The two chambers of the National Assembly he said have, come to the jolting realization that the Nigerian economy cannot fully develop without making the capital market the hub or pivot of its developmental strides.

    According to him, “this market has long been neglected and denied its rightful and strategic role in our march towards economic recovery. The Capital Market is a veritable institution for the mobilization, allocation and utilization of long term funds, not just by the Federal but also for States and Local Governments.”

  • SEC probes stockbroking firm over shares fraud

    SEC probes stockbroking firm over shares fraud

    Securities and Exchange Commission (SEC) has launched investigation into alleged multi-million Naira shares fraud involving a stockbroking firm, WT Securities Limited, in another high-profile case after the apex capital market regulator indicted and banned two BGL companies from the capital market.

    In a preliminary indictment charge, SEC, at the weekend, alleged that its preliminary investigation indicated that WT Securities Limited engaged in fraudulent sale and mismanagement of clients’ shares, valued at about N254 million.

    According to the apex capital market regulator, WT Securities Limited was alleged to have mismanaged the investment portfolio of Chief Opral Mason Benson valued at N185.20 million and also sold 500,000 shares of Nigerian Breweries belonging to one Ngozi Oyekwere Nwachuku without the authorisation of the client. The Nigerian Breweries’ shares are currently valued at about N68.5 million.

    “A preliminary investigation carried out by the Commission revealed that WT Securities Ltd sold the complainants shares without authority and management of the Commission has directed that the firm, its directors and sponsored individuals be invited to a meeting to explain their roles in the transaction,” SEC stated in the preliminary indictment charge.

    With the preliminary indictment, the directors and officials of WT Securities Ltd are expected to appear before the internal disciplinary panel of the apex capital market regulator tomorrow to “show cause why they should not be sanctioned for violating the provisions of Rules 43 and 182A (1), (3) and (5) of the SEC Rules and Regulations”.

    SEC, two weeks ago, withdrew and cancelled the registration of BGL Securities Limited and BGL Asset Management Limited after the Administrative Proceedings Committee (APC) found the firms and their operators guilty in a N2.2 billion asset management case.

    The APC, the adjudicatory arm of SEC, also banned key executives and management staff of BGL from the capital market for various numbers of years. However, BGL could appeal the decisions to the Investment and Securities Tribunal (IST).

    The APC found the two firms and their executives guilty of failure to honour N2.2 billion investment agreements in breach of extant capital market rules. The group managing director of BGL Group, Mr. Albert Okumagba and his deputy Mr. Chibundu Edozie were fined N100, 000 each and were banned for 20 years.

    The APC stated that the firms and their executives “engaged in acts capable of adversely affecting the investing public’s image of, and confidence in the capital market”.

    Besides, the indictment also referred the firms and the officials to the law enforcement agencies noting that “pursuant to Section 304 of the Investments and Securities Act 2007 all information on possible criminality in this matter be and is hereby referred to the appropriate law enforcement agencies and the Enforcement Department of the Commission shall follow up and ensure that the matter is brought to a logical conclusion”.

    Besides the cancellation of their registrations, BGL Securities was slammed with total fine of N22 million while BGL Asset Management was slammed with N5 million. Also, Mr. Peter Adebola was banned for five years, Joseph Ashley-Osuzoka was banned for four years with a fine of N100,000, Victor Obire was banned for three years with a fine of N100,000; Joshua Sesan Adetiloye was banned for one year; Nkechi Azubuike, Adekule Alli, Mohan Lalchandani, Anthony Nwozor and Oluwo Oluwale were all banned for one year and fined N100,000 each while Ande Ewubare, Victor Inyang, Hilary Eludu, Ehime Alofoje and Ofem Mbui Omni were slammed with two-year ban with a fine of N100,000 each.