Friday, July 31, 2015 11:12PM
As part of efforts to finally resolve the investor complaints made against BGL Group Plc, the Securities and Exchange Commission (SEC) will listen to the defence of the market operator before taking final decision.
SEC, in a notification pasted on the website yesterday, said BGL Group, its subsidiaries and sponsored individuals, will appear before the Administrative Proceedings Committee (APC) of the commission on Tuesday and Wednesday in Abuja.
SEC had in April suspended BGL Group, its subsidiaries and sponsored individuals from market operations. According to the commission, it received over 40 letters of investor complaints against BGL Group Plc alleging indebtedness to the tune of about N5.8 billion.
"Investigations were conducted and all-parties meetings were arranged by SEC during which repayment agreements were struck between BGL and some of the affected investors. Unfortunately, BGL continued reneging on promises to restitute investors.
Backed by a court order from the Investments and Securities Tribunal (IST), SEC set up a 7-man Interim Management Team (IMT) for BGL Group. This was a necessary, well-considered action with the sole objective of protecting investors while a more detailed forensic audit was conducted to determine the financial health of the companies within the BGL Group and the nature/extent of infractions committed by the BGL management.From the preliminary report of the forensic auditors, it was revealed, among other facts, that indeed BGL Group was in a critical financial state in which:The Group’s management had progressively eroded its shareholders’ funds through losses sustained over a 5-year period totaling about N48 billion as at December 31, 2014," SEC said.
The commission disclosed that while the IMT in conjunction with the forensic auditors were conducting formal investigations, BGL obtained a Federal High Court order asking the IMT to vacate BGL premises.
"In obedience of the court order, SEC complied with the ruling despite an existing order from the IST. In addition, BGL got another Federal High Court order mandating SEC to reverse the suspension. This ruling was given without putting the other parties on notice (exparte). The order has since lapsed, given the provision of the Federal High Court rules regarding all interim injunctions obtained exparte," the commission said.