Albert Okumagba Squandered BGL Group’s Shareholders N48 Billion Fund – SEC Reveals
A preliminary report of forensic auditors on BGL Group Plc, has revealed that the company has eroded its shareholders’ funds to the tune of N48 billion, according to the Securities and Exchange Commission (SEC).
SEC, in a statement posted on its website on Friday morning, said the management of BGL had progressively eroded its shareholders’ funds through losses sustained over a five-year period.
According to the commission, the cumulative losses amounted to about N48 billion as at December 31, 2014.
yemojanewsng.com reproduce the statement here unedited…..
BGL GROUP PLC, ITS SUBSIDIARIES AND SPONSORED INDIVIDUALS REMAIN SUSPENDED
AND HAVE BEEN INVITED TO APPEAR BEFORE THE SEC APC
The Securities and Exchange Commission (SEC) received over 40 letters of investor complaints against BGL Group Plc alleging indebtedness to the tune of about N5.8 billion. 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. Unfortunately, BGL continued reneging on promises to restitute investors.
Backed by a court order from the Investments and Securities Tribunal (IST), SEC set up a 7-man Interim Management Team (IMT) for BGL Group. This was a necessary, well-considered action with the sole objective of protecting investors while a more detailed forensic audit was conducted to determine the financial health of the companies within the BGL Group and the nature/extent of infractions committed by the BGL management.
From the preliminary report of the forensic auditors, it was revealed, among other facts, that indeed BGL Group was in a critical financial state in which:
- The Group’s management had progressively eroded its shareholders’ funds through losses sustained over a 5-year period totaling about N48 billion as at December 31, 2014.
- Billions of naira in investors’ funds were put at extreme risk through questionable investments by the BGL management in some illiquid, unlisted companies’ securities; one of which has been declared bankrupt.
- The Group has significant liquidity challenges making it unable to meet its responsibilities towards clients and investors as evidenced by over N11 billion in unpaid matured funds to investors.
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. In obedience of the court order, SEC complied with the ruling despite an existing order from the IST.
In addition, BGL got another Federal High Court order mandating SEC to reverse the suspension. This ruling was given without putting the other parties on notice (exparte). The order has since lapsed, given the provision of the Federal High Court rules regarding all interim injunctions obtained exparte.
In view of the fact that the interim order has lapsed, we wish to reiterate to the general public that BGL Securities Limited, BGL Capital Limited, BGL Asset Management Limited, All BGL Group sponsored individuals (as at December 31st, 2014) 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 August 4th and 5th 2015 to explain the allegations of capital market infractions against them.