The Securities and Exchange Commission (SEC) on Thursday said that preliminary report of forensic auditors on BGL Group Plc revealed that the company eroded its shareholders’ funds to the tune of N48 billion.
The commission in a statement posted on its website said that the company”s management progressively eroded its shareholders’ funds through losses sustained over a five-year period totalling about N48 billion as of Dec. 31, 2014.
“From the preliminary report of the forensic auditors, it was revealed, among other facts, that indeed BGL Group was in a critical financial state,” said the statement.
It also stated that the commission received over 40 letters of investors’ complaints against BGL Group Plc alleging indebtedness to the tune of about N5.8 billion.
The statement said that investors’ funds were put at extreme risk through questionable investments by the BGL management in some illiquid and unlisted companies’ securities, one of which had been declared bankrupt.
It further stated said the group had significant liquidity challenges which made it unable to meet its responsibilities towards clients and investors as evidenced by over N11 billion in unpaid matured funds to investors.
The statement said that 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.
It said that BGL failed despite promises to restitute the affected investors leading to its suspension from all capital market activities.
“Backed by a court order from the Investments and Securities Tribunal (IST), SEC set up a seven-man Interim Management Team (IMT) for BGL Group.
“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,” said the statement.
It said that the commission complied with the ruling in spite an exiting order from the Investment and Securities Tribunal (IST) in obedience of the court order.
“In view of the fact that the interim order has lapsed, we wish to reiterate to the general public that BGL Securities Ltd., BGL Capital, BGL Asset Management and all BGL Group sponsored individuals and Mr Albert Okumagba remain suspended from all capital market activities.
“Additionally, they have all been invited to appear before the SEC Administrative Proceedings Committee (APC) sitting slated for Aug 4 and 5 2015 to explain the allegations of capital market infractions against them,” added the statement.
Who is culpable? Who is liable? Someone has to be held responsible. Someone has to take the rap for it.