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Investors Worried About N10 million Fraud Allegations Against SEC

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  • Investors Worried About N10 million Fraud Allegations Against SEC

Stock market investors have expressed concern over the alleged N104million fraud levelled against the Director General (DG), Securities and Exchange Commission (SEC), Mounir Gwarzo, saying that such crisis would definitely have a multiplier effect on market.

The shareholders, who spoke in an interview with The Guardian, noted that the regulatory supervision of the stock market is worrisome, especially now when the market is gradually recovering.

They called for proper investigations into the allegation, and urged the Federal Government to intensify efforts to tackle the crisis of confidence brewing in the nation’s capital market in recent times.

The President, Progressive Shareholders Association of Nigeria, Boniface Okezie, wondered why the SEC’s boss would receive severance package, while still in service.

“Why must he approve such benefit? If the allegation is substantiated that the DG received a severance benefit when he is not ready to leave office, the management must be queried,” he said, while blaming the absence of a Board for the Commission as given room for such malpractices.

“The Federal Government is not interested in the capital market. If this allegation flying is proven, it becomes more worrisome especially to the market. We are talking about restoring investors’ confidence, and all these corporate governance and accountability issues are coming up. These issues must be tackled to retain confidence in the market,” he added.

The President, Standard Shareholders Association of Nigeria, Godwin Anono, decried the high level of malfeasance and corporate governance lapses recorded in the market presently.

He cited the case of the recent over N10billion scandal, relating to diversion and misappropriation of funds by Partnership Securities Limited (PSL), and its sister companies – Partnership Investment Company Plc; Life Care Partners Limited; and SBDC Microfinance Bank Limited, where over 300 investors of Partnership Investment whose stocks worth N4.8billion were involved in a ‘shady’ deal.

According to him, there was need for the market to go through proper sanitisation process to get rid of the ‘bad eggs’ in the market and boost retail investors’ confidence.

“All these will affect the market; even the regulator is being accused. The market needs a general clean-up to get rid of all these fraudsters; it was not like this before. Nobody is buying shares because many people are broke.”

The President, Proactive Shareholders Association, Taiwo Oderinde said: “I believe this is the time every capital market stakeholder should work for the interest of our market, and to sustain investors’ confidence instead of destroying it. We should be careful of the information we carry because the market is information driven.”

Gwarzo has been accused of paying himself severance package worth N104 million. The SEC boss, allegedly received a severance package amounting to the tune of N104million, when he became DG in 2015 .Gwarzo reportedly requested for the money as severance package for his previous position as commissioner, despite opposition from the head of the SEC’s legal department.

The SEC DG was further accused of violating the rules guiding the SEC, by awarding contracts to his family and friends. A petition has been written to the House of Representatives, over the alleged fraudulent activities.

Efforts to get the Commission’s side of the story proved abortive, as its spokesman Naif Abdussalam, in an electronic mail said: “Our stand for zero tolerance to market infractions is the main reasons for character defamation we are witnessing. ‘When you fight corruption it fight back’, may our nation and institutions be strengthening to fight corruption to its logical end.”

In regards to the trending of the crisis on the online media about “‘How SEC Director-General Illegally Paid Self Severance Benefit, Awarded Contracts To His Companies’ and hereby state that it had been aware of the allegations contained in that article since January 2017, following the receipt of a petition.

“As a tradition, the Commission follows laid down rules and regulations in all its activities, and in this particular case, we ensured that no relevant policy was breached. However, the Commission is currently putting together an official response and will issue same shortly.”

Meanwhile, a former Director-General of the Commission, Wole Adetunji, has stressed the need for the Federal Government to urgently reconstitute a Board that would govern the affairs of the SEC.

According to Adetunji, “You cannot leave the activities of the capital market of Nigeria in the hands of one person. It is quite unfortunate that Nigeria pays more attention to the money market than capital market, but no economy can grow without a robust capital market.

“We must review the entire financial system of Nigeria. This is long overdue. There may be overlapping responsibilities but there should be some streamlining for it to work efficiently.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Investment

China’s State-Owned Lenders Allocate $8 Billion to Revitalize Property Market

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China’s state-owned lenders have committed a substantial $8 billion in loans to rejuvenate the country’s beleaguered property market, aligning with Beijing’s directives to bolster the sector.

Agricultural Bank of China Ltd. disclosed approving over 40 billion yuan of loans for real estate projects on predefined white lists, signaling a proactive approach towards supporting the housing market’s recovery.

China Construction Bank Corp. also joined the effort, extending 3 billion yuan to five property projects, with plans to greenlight over 20 billion yuan in loans soon.

Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. are among the institutions offering financing assistance, although the exact loan amounts remain undisclosed.

This initiative follows Beijing’s recent call for local authorities to enhance financing support for developers and curate lists of eligible projects.

In response, the big four state lenders pledged to meet reasonable financing demands from developers and projects identified under the coordination mechanism.

However, China’s property market faces challenges despite these measures. New home sales plummeted 34.2% year-on-year, underscoring the ongoing slowdown.

While existing home transactions surged during the Spring Festival holiday, new home sales remained subdued, prompting a cautious outlook among buyers.

The infusion of $8 billion aims to instill confidence and stimulate activity in the property sector, potentially heralding a gradual recovery amid persisting market uncertainties.

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BUA Foods Invests $200m in Lafiagi Sugar Estate Expansion

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BUA Foods, a leading Nigerian food conglomerate, has announced an investment of $200 million in its Lafiagi Sugar Estate located in Kwara State.

The Managing Director of BUA Foods, Ayodele Abioye, revealed this during a press briefing held at the company’s headquarters in Lagos.

Abioye said the leading company plans to enhance its integrated sugar estate project to reduce reliance on foreign exchange for raw materials.

The project includes the construction of a sugar refinery, ethanol plant, and supporting infrastructure aimed at bolstering local production.

The Lafiagi Sugar Estate spans approximately 20,000 hectares and integrates various components such as a sugar refinery with a daily capacity of 20,000 metric tonnes, along with an industrial ethanol plant.

Abioye underscored the importance of reducing dependency on forex for sourcing raw materials, citing challenges faced due to Nigeria’s lack of industrial agricultural production of sugarcane.

BUA Foods aims to bolster its local supply chain by engaging with communities and establishing partnerships in agriculture.

Abioye emphasized the need for sustainable practices and community involvement in fostering self-sufficiency.

The company’s investment reflects its dedication to expanding domestic production capabilities and driving economic growth in Nigeria’s agricultural sector.

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Nigeria’s One-Year Treasury Bill Oversubscribed by 300%

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Nigeria’s one-year treasury bill was oversubscribed by 300% during the recent Primary Market Auction conducted by the Central Bank of Nigeria (CBN) on Wednesday.

The auction, aimed at rolling over maturing Nigerian Treasury Bills worth N1 trillion, saw unprecedented demand for the one-year T-bill.

Investors offered a total of N1.87 trillion for the N600 billion on offer, indicating a significant appetite for government securities. Out of the total subscriptions, N908.75 billion was allotted, with stop rates set at 19%.

The auction covered maturities across three different tenors: 91-day, 182-day, and 364-day bills, with varying amounts on offer.

While the 91-day bill received N39.90 billion in offers, all were sold, and the 182-day bill garnered N76.83 billion subscriptions, out of which N51.35 billion was allotted.

Managing Director of Arthur Steven Asset Management, Tunde Amolegbe, attributed the remarkable performance of the one-year bills to investor confidence in the current government and its reform initiatives.

He highlighted investors’ preference for higher rates due to signals from the CBN indicating tightening monetary policies amid accelerating inflation.

Experts view the oversubscription as a testament to investors’ trust in the government’s reforms and management of the country’s debt obligations.

The auction reflects a move by the CBN to address liquidity in the financial system while managing Nigeria’s debt obligations effectively.

The significant oversubscription signals robust investor confidence and highlights the attractiveness of Nigerian government securities despite prevailing economic challenges.

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