The Federal High Court in Lagos yesterday validated the suspension of BGL Group from the capital market by the Securities and Exchange Commission (SEC).
Justice Mohammed Yunusa nullified an interim injunction barring SEC from expelling the group from all capital market activities for alleged malpractices.
BGL was accused of owing investors about N5.7 billion, including the Rivers State government.
SEC reportedly received about 40 petitions on BGL’s alleged failure to return investments at maturity.
In its preliminary objection to BGL’s suit, the commission said the group was indebted to investors to the tune of N5,769,993, 553.67 as at June 2.
It added that BGL was having liquidity problems and ran at a loss of over N48 billion as at last December.
[quote_box_center]According to SEC, BGL Asset Management Limited, contrary to its mandate, wholly transferred funds received from the investing public to BGL Plc without engaging in any form of Fund/Portfolio Management.[/quote_box_center]
But BGL on May 27obtained to an order restraining SEC from “holding and or conducting any trial or hearing in respect of the alleged complaints against the plaintiffs…” and from giving effect to the ban pending the suit’s determination.
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.
But SEC applied to the court to discharge the order. Justice Yunusa yesterday held that BGL concealed facts from Justice Saidu.
Justice Yunusa agreed with SEC’s lawyer Kayinsola Ajayi (SAN), who argued that the order was granted in error.
He adjourned to September 22 for ruling on pending applications.