SEC NIGERIA CANCELS BGL SECURITIES LTD CERTIFICATE

The Nigerian securities and Exchange commission (SEC) has cancelled the certificate of registration of BGL Securities Ltd as dealer/broker at the Nigerian stick exchange and banned its group managing director Mr Albert Okumugba from engaging in any capital market activities.
This is because, says SEC in a notice on its website, against the established rules, they engaged in market activities they were not registered for, breached minimum liquidity/assets ratio and also solicited for deposits.
Also banned for periods ranging from five years to one year were some top executives and directors of the company up to 2015. Most of them were also asked to pay N100,000 fine each in addition to ban imposed on them.
This followed complaints received from some people including Delta State ministry of finance, about their inability to retrieve their investment in a reportedly "high yield investment product" called Guaranteed Consolidated Notes (GCN) pushed through private placement by BGL group.
During the public hearing on the complaints, BGL Securities had tried to convince SEC that the scheme was infact developed and issued by BGL Asset management ltd duly registered by SEC  as fund and portfolio manager.
The respondents also canvassed that marketing of GCN was a group thing on behalf of BGL Asset management ltd.
However, none of these held water with the SEC committee because, says SEC, BGL Securities Ltd issued marketing materials in its name, issued receipts to some investors in its name and above all, it was established that GCN funds were not controlled by the Asset management arm but by the group treasury exclusively.
However, on the allegation that the GCN scheme was unregistered, this was stroke out on the grounds that the onus was on SEC to so prove but no such proof of non registration was offered.
In the end, three complainants  were asked to be paid various sums plus interest due. Mr Afolabi Gabriel Olunseye is to be paid N5m plus 13.5% interest, Dr Okon Rufus C. to be paid N5m plus 14% interest while the estate of late Chief John Chuks Adigwe is to be paid N30m plus 15% interest.
In addition, the following were to receive monies due to them: NOUN staff Cooperative (N24m); Delta state Ministry of finance (N1876.2m); Azort Nigeria ltd (N203.8m); Professor Umunnakwe N10.97m; and Mahmoud Using N10.75m.
BGL Asset Management ltd as second respondent was also to pay N5m for breach of rules while BGL Securities as first respondent will pay total of N17m for breach of SEC rules.
It is possible that BGL Securities ltd may head for the high court to challenge the SEC decision. This is because last year, it got an injunction stopping SEC from holding public hearing on complaint by the Rivers State ministry of finance and 31 others about the same GCN product
The SEC committee however went ahead this time around saying that the 10 complaints dealt with were fresh ones different from the ones over which the injunction subsists.
The injunction, they said, was specific and not a blanket order against holding any public hearing on complaints against BGL Securities Ltd.