SHARE SCAM: Analysts say NSE, CSCS still has questions to answer


MON, FEBRUARY 20 2017-The verdict didn’t go down well with some anxious investors and analysts.

They say the Nigerian Stock Exchange, (NSE) and the Central Securities Clearing System (CSCS) still has questions to answer for the misappropriation of N1, 237,245,000 and US$80,000.00 being proceeds of sale of 96,077,872 units of Ecobank Transnational Incorporated Plc (ETI) belonging to Mr. Arnold Ekpe, a former CEO of ETI.

Early last week, the apex regulator of the Nigerian capital market, the Securities and Exchange Commission (SEC) said that the broker-dealer and not the Nigerian Stock Exchange (NSE) or Central Securities Clearing System (CSCS) is liable for the misappropriation of the proceeds of sale. They laid the blame squarely on Partnership Securities Limited, the broker-dealer firm that over-saw the soured deal.

But analysts are saying that the Direct Cash Settlement rule was deliberately ignored. The Direct Cash Settlement is a process where cash proceeds from trades executed by brokers on the Exchange settles directly into investors’ bank account. It starts when a client gives his broker the mandate to sell his or her shares. Once those shares are sold, payment is made directly into the client’s account.

One analyst in response to the NSE/CSCS position argued thus: “Whilst the stockbroker Ogiemwonyi has admitted stealing the funds, the NSE and the CSCS are yet to explain how money meant for investor’s account under direct cash settlement has been paid to the stockbroker in error therefore giving him the opportunity to steal it.”

Close associates to Ekpe, said that the SAN had sought clarification from the NSE based on the Direct Cash Settlement rule before trying to force a refund from the apex regulator on account of negligence.  Mr. Dele Belgore, Ekpe’s lawyer, signed the letter of complaint to the regulators on November 15.

One NSE observer told the G&BJournal that the regulators may have been “asleep” or somebody there with oversight may have been fast asleep. “The money in question is too huge for them not to have known that something fishy had gone down or that the money had gone into the brokers’ account in violation of the law,” he said.

Ogiemwonyi, who is currently in Ikoyi Prison awaiting trial on three counts charge of stealing over N1.2 billion and $80,000 belonging to Arnold Ekpe (SAN), allegedly admitted in a letter to Ekpe, dated October 17, 2016, that his company misappropriated the money.


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