Sunday, March 22, 2015 14:48 PM / Share Support Services firstname.lastname@example.org
Further to the action of the Securities and Exchange Commission (SEC) to suspend Woodland Capital Markets Plc indefinitely from all capital market activities for “the unauthorized sales of 3750 units of PZ shares belonging to an investor”, the share support unit sought out the capital market operator to learn more about the enforcement action.
In the course of the enquiry, management took pains to provide a background to the issue, especially the distinction between the period under which it occurred and the fact that the entity was under new promoters. Management represented that the shares sale was done in 2011 by the old promoters of Woodland Capital as the current management came in and took over Woodland in July 2013.
The build up to the suspension, as narrated by the managing director of Woodland Capital Markets Plc; started in 2003 when the investor bought a PZ share certificate directly from another person without going through the standard practice of share transfer done by an accredited stockbroker.
The investor gave the bought PZ certificate to a jobber (agent) to process the transfer of the PZ shares in the investors name.
The agent went ahead to BeachGrove Securities & Inv Ltd to process trading account for the investor and bought 3750 units of PZ shares in the investors name without making payments while the share certificate also given to the agent can't be traced as there is no evidence of its verifcation and transfer into a CSCS account.
Since then the investor has been getting returns on the investment as both dividends and bonues declared have been going directly to him.
In 2011, BeachGrove Securities looked into his records and discovered that 3750 units of PZ shares were bought for the investor by an agent with no evidence of payment.
They wrote to the investor notifying him that it was on record that an agent bought 3750 units of shares in his name and there is no evidence that the transaction was paid for.
As such, since you have been receiving both dividends and bonuses on the investment. You will have to return them to BeachGroove Securities as you did not pay for the shares in the first instance.
The investor did not respond to the correspondence from BeachGroove. During this period, BeachGroove was having issues in the market and inactive. It went ahead to contact Woodland Capital Markets to help in the sales of the 3750 units of PZ shares with an indemnity to cover the transaction.
Eventually, the sales was carried out by the old promoters of Woodland Capital as instructed by BeachGrove Securities.
The new and current promoters of Woodland Capital which came on board in July 2013 got a hint of the issue and made efforts to clarify the issue with SEC.
In November 2014, Woodland Capital bought back the 3750 units of PZ in order not to soil their name and that of the new management of the dealing firm.
However, SEC went ahead to suspend the firm based on fines that have been accruing since 2011 when the sales was carried out, for which no resolution has been achieved.
We understand that the parties will be meeting in Abuja on Monday; and we hope to follow through with enquiries from SEC.