The protracted crisis which has continued to plague BGL Group came to a head a few days ago, when the Securities and Exchange Commission (SEC) suddenly stopped it from playing in the capital market.
SEC suspended BGL Asset Management ltd, BGL Capital ltd and BGL Securities ltd from all market activities.
It also directed that Mr Albert Okumagba, the Group Managing Director, BGL Group, should cease to be a registered sponsored individual with the commission.
The regulator also supervised the withdrawal of the registration of BGL Plc as a capital market operator.
While the regulator alleges that BGL has been involved in so many infractions to the detriment of the capital market, shareholders activists fingered the operators shady activities during Transcorp Hotels’ spin off from Transnational Corporation of Nigeria as what broke the camels back.
Their view is that BGL Group has smeared its hands in dirty deals and must be penalized.
However, SEC has commenced a forensic investigation on the company’s deals over the years.
The apex regulator said that all suspicious transactions observed in the course of the investigation of the company had been referred to the appropriate law enforcement agencies for further investigation.
It stated that BGL Asset Management, BGL Capital and BGL Securities and all individuals involved in the management of the said companies had been referred to the SEC Administrative Proceedings Committee (APC).
SEC explained that the suspension was a fall out of the commission’s Executive Management Committee meeting held on May 19. It said that the committee considered the report of a detailed investigation into the various complaints received from investors against subsidiaries of BGL Group.
“All sponsored individuals of BGL Asset Management , BGL Capital and BGL Securities whose particulars are contained in the commission’s record as at December 2014 be suspended from performing any capital market activity.”
In addition the apex regulator constituted an interim management team to take over management of headed by Mr Oladipo Aina to take over management of the company. Others members of the team are Mr Abubakar Ambursa, Mrs Hafsat Rufai, Ms Temitayo Siyanbola and Ms Tonne Ladipo-Ajayi
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’ confidence.
Mr Mounir Gwarzo, SEC Director-General, in April said that the commission was investigating the operations of BGL Plc, a financial services company.
Gwarzo said that the commission had set up an interim management team to investigate the company’s operations.
“What we did for BGL was basically extending our investigation process.
“We undertook target inspection of BGL, when we finished the investigation, we came up with our
own report and we wrote them a letter and we said we wanted them to clarify.
“They responded by asking us for additional time to respond and we granted them that additional time and they responded.
“We reviewed their response and we felt there is a need for us to go in and confirm or clarify certain things.
That is the situation we are in now,” Gwarzo said.
He said that the findings of the interim management team would determine its next line of action.
“We set up an interim management team that has already moved in and is doing its job and I don’t want to pre-empt what they will come up with.
But the moment they finish the report, SEC will look at it and take the next line of action,” Gwarzo said.
Meanwhile, shareholder activists have described Okumagba’s sack by the SEC as a welcome development, noting that BGL board was suspended after the commission wrote, seeking clarification about complaints against it before reaching its decision.
They believe the intervention is an effort to save the group, which provides advisory services and products to clients, including governments, corporations, financial institutions and high net worth individuals, from going under. They said the decision would restore credibility to the nation’s capital market as the BGL has been violating rules and regulations with impunity over the years.
According to Adebayo Adeleke, “let’s give credence to the Gwarzo-led administration at SEC. As Acting Director-General, Gwarzo has shown that something good can come from SEC. Before now, a decision like this has not been taken by the commission in the past.
“This may also be informed by the fact that Gwarzo has rose through the ranks in the Commission and that he has seen the rot in the system and he understands the dynamics. I also think that the intervention is to preserve value to BGL”.
For the National Coordinator of Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, the suspension “was expected. He has been one of the ‘untouchables’ in the sector and others like him will now know that theirs is waiting in the corner”, said Nwosu.
One of the issues that may have led to the suspension, Nwosu believes, was Transcorp Hotel Plc public offer, lamenting that minority shareholders of Transnational Corporation of Nigeria Plc were not consulted by the board before the decision to pull it out of the group.
His words: “If you want to pull out a company from a bigger one, is it not in order if you carry along the owners of the company, who are shareholders of the company? The company, in connivance with BGL went ahead and pulled out the company.