By Bamidele Ogunwusi
•Shareholders support action, amidst calls for his resignation as CIS President’
When the news broke on Monday that the Securities and Exchange Commission (SEC) had sacked the Albert Okumagba-led management and board of BGL Plc, appointing an interim management board in its place, many where shell-shocked.
But for those in the know, it was rather a case of the hunter becoming the hunted one.
According to a credible market source, the travail of Okumagba, current President of the Chartered Institute of Stockbrokers (CIS) started last month, when President Goodluck Jonathan visited the nation’s capital market community to appeal for the much needed votes to ensure his re-election.
At the close door meeting held on the Nigerian Stock Exchange (NSE), stockbrokers were encouraged to recommend a new Director-General of the SEC as replacement for Ms. Arunma Oteh, who did not secure a second five-year term after the first ended in December. To avoid a vacuum, Alhaji Mounir Gwarzo, the most senior executive commissioner at the commission, was appointed acting DG, while awaiting confirmation.
In line with the President’s request, the CIS was said to have nominated Alhaji Muritala Ariyo Olusekun, its immediate past President and Okumagba’s predecessor for appointment. Ahead of this, there were reports of Jonathan appointing a new SEC DG some weeks ago.
Apparently irked by this, the SEC management is said to have moved against Okumagba.
In doing so, the source told Daily Independent, Gwarzo and the SEC “latched on the issues BGL (founded in 1993 as formerly Banc Guranti Limited) had, dating back from several years ago, even before the 2007/2008 market meltdown.”
He, however, lamented the failure of the SEC to ensure fairness, because there are several other stockbrokerage firms with similar problems- poor assets quality, margin loans, over leveraging and investments in quoted companies whose share prices have fallen by as much as 80 per cent. It is not known yet how much is ascribed to BGL in terms of margin loans, but a Federal High Court in Lagos had in October last year ordered BGL to pay First Bank of Nigeria Limited N1.407 billion for the credit facilities the bank advanced to the company.
Meanwhile, shareholder activists on Tuesday 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.
“Okumagba gave only one week for Nigerians to buy 800 million shares, but we were the ones who stood against it before it was extended. I reported the issue to the President of the Nigerian Stock Exchange (NSE), Aigboje Aig-Imoukhuede, but nothing serious happened. Okumagba forced the NSE to approve the offer.
“What we are seeing now is to tell people that nobody is untouchable. I have no sympathy for him. Minority shareholders don’t have all the equity to fight but this has shown that peoples’ wish are done”.
Another activist, Boniface Okezie, said the SEC decision is a “great one,” for which shareholders and investors are happy at the decision.
Shareholders activists who spoke to Daily Independent said Okumagba should also resign his appointment as the President of Charted Institute of Stockbrokers (CIS), because “his credibility is in doubt”.
Following the sack, SEC appointed an interim management board, led by Oladipo Aina, also a former President of the CIS. Other members are: Abubakar Ambursa, Mrs. Hafsat Rufai, Ms. Temitayo Siyanbola and Ms. Tonne Ladipo-Ajayi.
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