The Securities and Exchange Commission (SEC) yesterday urged the Federal High Court in Lagos to strike out a suit by BGL Plc, its subsidiaries and others over allegations that they are indebted to investors to the tune of N5.7billion.
Some of the investors, including Rivers State government, had petitioned SEC over BGL’s alleged failure to return their investments at maturity. SEC, in the preliminary objection, said BGL is indebted to the investors to the tune of N5,769,993, 553.67 as at June 2. It added that BGL is having severe liquidity problems and has been running at a loss to the tune of over N48billion as at December 2014.
According to SEC, BGL Asset Management Limited, contrary to its mandate, wholly transfers funds received from the investing public to BGL Plc without engaging in any form of Fund/Portfolio Management. But BGL obtained an order restraining SEC from “holding and or conducting any trial or hearing in respect of the alleged complaints against the plaintiffs…” pending the hearing and determination of the suit.
The plaintiffs are BGL Plc, BGL Asset Management Limited, BGL Capital Limited, BGL Securities Limited, Mr Albert Okumagba, Chibundu Edozie, Teddy Okumakube, Loraine Awoonor-Renner, Ehime Alofoje, Joseph Ashley-Osuzoka, Andre Ewubare, Victor Obire and Nkechi Azubuike. They sued SEC, its Administrative Proceedings Committee (APC) and Mounir Gwarzo.
Justice Mohammed Idris had ordered parties to maintain status quo ante bellum pending further orders. SEC had suspended BGL Asset, BGL Capital and BGL Securities from all capital market activities, withdrew the registration of BGL Plc as a capital market operator and directed that Okumagba should cease to be a registered Sponsored Individual with SEC.
Dissatisfied, BGL sued SEC, challenging the suspension. The plaintiffs said the wide publicity SEC gave the suspension, including posting it on SEC’s website with worldwide access, has caused adverse effect on BGL and injured the plaintiffs in every conceivable manner. BGL said it is contrary to the rules of natural justice for SEC’s APC to adjudicate over the complaints which was the basis for its indictment and suspension.
It urged the court to restrain SEC from making further media publication of the allegations of crime and unethical conduct, adding that “unless the defendants are restrained in the manner sought, no amount of monetary damages will adequately compensate the plaintiffs for the loss that continues to be incurred by them by the defendants’ conduct.”
SEC, in the preliminary objection, is contending that the court lacks jurisdiction to entertain the suit on the ground that only the Investment and Securities Tribunal has the exclusive jurisdiction to adjudicate disputes between the commission and a capital market operator.
Besides, the commission said the plaintiffs’ claim “is based on speculations and presumptions and has not raised any reasonable cause of action.” The plaintiffs’ counsel Adebowale Kamoru said he needed at least seven days to respond to SEC’s objection.
Justice Idris adjourned to August 13 for hearing.
