Breaking News
Translate

SHARE SCAM AT PARTNERSHIPS: Investors jostle to recover N10bn investments

By Peter Egwuatu

INVESTORS in the nation’s capital market are strategizing on how to rescue their investments estimated at N10 billion which were trapped in the troubled Partnership Investment Company, PIC Plc and Partnership Securities Limited, PSL.

Mr Victor Ogiemwonyi

Financial Vanguard checks with some of them reveal that while some are considering joint liquidation action that entitles them to the first line charge on the companies’ assets, others are advising the investors to move their holdings to other stockbroking firms while piling pressures on the regulatory authorities for redress for those whose investments were already lost to the controversies surrounding the transactions.

After a long-drawn investigations of the transactions SEC, last week, banned the managing director of PIC, Mr. Victor Ogiemwonyi, for life from holding directorship positions in any public company in Nigeria and meted out other punishments to the directors on the Board of the companies.

The investors are now demanding that the Commission and the Nigerian Stock Exchange, NSE, commence and execute the refund of money to investors in accordance with provisions of the Investors Protection Funds, IPFs, of both entities.

Reactions:

Speaking to Financial Vanguard on the development, Mr. Sola Alabi, a victim of the share scam said, “We commend the Commission for the bold step taken and the timely intervention. Some of us are planning to commence liquidation processes to recover our money, though, we learnt that the companies’ liability is more than the assets. Well, we want the Commission to carry out its own forensic auditing to speedy liquidation.”

Mrs. Bisi Bakare, Chairman, Pragmatic Shareholders Association of Nigeria, PSAN, stated: “For those investors who are still in the company list, there is nothing to fear as there is a window for people to transfer their shares to other reputable stock broking houses. What the concerned investors should do is to approach another broker of their choice and seek transfer of shares as all shares issued are captured in the Central Securities Clearing System, CSCS data base.

“The process of transferring shares should commence now. So, investors should not wait until when the company is liquidated. Again, this is the beauty of electronic process of keeping shares with the CSCS and we should commend the regulators for that mechanism.”

Mr. Oderinde Taiwo, National Coordinator, Proactive Shareholders Association of Nigeria (PROSAN) said, “Those who lost money should seek refund of money through the IPFs of both the SEC and NSE.

Liquidation of the companies

We have been hearing of these Funds in the newspapers. Sometime in the past few years, we heard that the Federal Government intends to inject the sum of N6.5 billion into the Capital Market to shore up its fortunes and protect investors’ funds. So, this is time for the regulators to reward these investors.”

On the liquidation of the companies she stated: “I think the SEC should carry our forensic auditing in the interim before any liquidation of the entities. The regulators must have placed some of these shares belonging to the victims of the share scam on technical suspension. So, in all we supported the actions of the Commission and they should keep it up.”

Referring to a possible recourse to IPF for recovery of the jeopardised investments, Mr. Moses Igbrude, spokesperson of Independent Shareholders Association of Nigeria, ISAN, said, “I don’t know if the Fund is working. But if it is working, fine; the regulators should begin the process of refunding those victims. Although, according to what I heard the money might not cover what was lost. The most effective way is to liquidate the firms and use the proceeds to settle the investors. The IPF will not be enough to settle the victims considering the alleged huge amount of money going into billions of naira. On the whole I hail the decision of the Commission because that is one of the ways to sanitise our market.”

Mr. Boniface Okezie, Chairman, Progressive Shareholders Association of Nigeria, PSAN, stated: “We encourage the SEC to look at other operators that have been petitioned against fraudulent acts and take the necessary step to enforce its penalties on them. The market is not a place for people to get duped but for people to invest.  So the rules must be followed and investors’ interest guaranteed. I commend the SEC for the ban and other punishment it imposed on the culprits.

“On the IPF, I think the regulators should reward the small investors whose money is not much. But SEC should partner with the EFCC to recover the swindled money. They should look at both moveable and unmoveable properties of the companies, check where some of these funds are deposited and recover them to pay back those big time investors who were victims of the scam. We don’t want Ogiemwonyi and others to get away with this money, everything necessary should be done by SEC and EFCC to recover the money and settle investors.”

SEC’s rulings

Aside the ban on Ogiemwonyi, SEC has also withdrawn the operating licence of the companies. Chairman of the company, Mr. Henry Omoragbon, was also suspended for a period of five years from engaging in activities in the Nigerian Capital Market.

According to a statement by the SEC, “pursuant to Section 38 (4) of the Investments and Securities Act 2007 and Rules 34 (1), (a) of the SEC Rules and Regulations made pursuant thereto, the certificate of registration of Partnership Investment Company Plc is hereby cancelled without prejudice to the recovery of all existing liabilities due to the complainants and penalties payable to the Commission.

“Mr. Victor Ogiemwonyi is hereby banned for life from engaging in capital market activities in the Nigerian Capital Market and ordered to pay a penalty of N100, 000 (One Hundred Thousand Naira only) for breach of Rule 1(iii) of the Code of Conduct for Capital Market Operators and their Employees as contained in the SEC Rules and Regulations made pursuant to the Investments an Securities Act 2007. He is also banned for life from holding directorship position in any public company in Nigeria for his unprofessional conduct in respect of the activities of both companies.

“Mr. Henry Omoragbon is hereby suspended for a period of five years from engaging in capital market activities in the Nigerian Capital Market and ordered to pay a penalty of N100, 000 (One Hundred Thousand Naira only) for breach of Rule 1(iii) of the Code of Conduct for Capital Market Operators and  their Employees as contained in the SEC Rules and Regulations made pursuant to the Investments an Securities Act 2007.”

The decision also stated that pursuant to Section 304 of the Investments and Securities Act 2007 all information on possible criminality in the matter would be referred to the appropriate law enforcement agencies.  Some Directors of the company, Mr. Ojetunde Taiwo, Mrs. Ogiemwonyi Olufunke, Mr. Ogiamien Frank, Mr. Adeusi Aladejola Alexander,  Mrs Arese Ugwu, were also suspended for a period of five years from engaging in capital market activities in the Nigerian Capital Market; banned from holding directorship positions in any public company in Nigeria for the said period and ordered to pay a penalty of N100, 000 (One Hundred Thousand Naira only) each for breach of Rule 1(iii) of the Code of Conduct for Capital Market Operators and Their Employees as contained in the SEC Rules and Regulations made pursuant to the Investments and Securities Act 2007.

Mr. Eseha Augustine Enejeta, a Manager in the company was suspended for a period of One year from engaging in capital market activities in the Nigerian Capital Market and ordered to pay a penalty of N100, 000 (One Hundred Thousand Naira only) for breach of Rule 1(iii) of the Code of Conduct for Capital Market Operators and Their Employees as contained in the SEC Rules and Regulations made pursuant to the Investments an Securities Act 2007.

 


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.