Federal High Court says BGL Plc brought ‘incompetent’ cases against SEC

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THUR, NOVEMBER 3 2016-Federal High Court sitting in Lagos has dismissed three cases filed against the Securities and Exchange Commission (SEC) by BGL plc and its chief executive, Alfred Okumagba and the company’s subsidiaries and described the suits as “incompetent.”

The SEC suspended BGL Asset Management Ltd, BGL Capital Ltd and BGL Securities Ltd from all capital market activities April 2015 following stack of petitions which it subsequently investigated before handing down its suspension orders. BGL Plc at that point was equally struggling to meet its financial obligation and was indebted to its investors to the tune of N5.7 billion.

In all, 35 persons blew the whistle on BGL plc with a series of complaints concerning their investment in the Guaranteed Premium Notes (GPN), Guaranteed Consolidated Notes (GCN), Private Placement and other Schemes promoted by the BGL Group.

SEC confirmed the complaints of the affected 35 persons and also concluded that the BGL group had acted in violation of the provisions Sections 38, 60 (1), 61 (1), 160 and 161 (1) of the ISA 2007, and suspended BGL Asset Management Ltd, BGL Capital Ltd and BGL Securities Ltd from all capital market activities .

Other infractions observed during the investigation were breach of the provisions of Rules 3 (4), 22 (4), 34 (1e), 65 (5) and 60 (1f) of the SEC Rules and Regulations.

SEC explained that all suspicious transactions observed in the course of the investigation had been referred to the appropriate law enforcement agencies for further investigation.

In reaction, the BGL Group proceeded to the Federal High Court and instituted the following actions against the Commission:

FHC/L/CS/767/2015 BGL PLC & 4 ORS VS Securities and Exchange Commission, challenging the suspension and sanctions pronounced on them by the Commission on the ground inter alia that the Executive Management Committee of the Commission is not the competent body to pronounce such sanctions.

FHC/L/CS/1050/2015 BGL PLC & 12 ORS VS Securities and Exchange Commission & 2 ORS seeking among others, a declaration that the APC of SEC cannot adjudicate on the subject matter of the complaint in APC/1/2015 as doing so would violate the Plaintiff’s right to fair hearing as enshrined in the rules of natural justice and guaranteed by the Constitution.

FHC/L/121/2016 BGL Assets Management Limited & 22 ORS VS Securities and Exchange Commission & ANOR, seeking among others an Order prohibiting the Commission from conducting a hearing on the complaints against them, pending the hearing and determination of all the pending cases.

Okumagba, prior to the investigation, was the President, Chartered Institute of Stockbrokers (CIS) but was asked to step aside by the institute because of investors’ to maintain confidence.

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