A Federal High Court in Lagos on Wednesday rejected the prayer by BGL Group not to urgently hear a case it filed against the Security and Exchange Commission to challenge its suspension from capital market activities.
BGL on May 27, 2015, obtained an interim injunction by Justice Saliu Saidu restraining SEC from suspending it from participating in capital market activities.
The decision to suspend BGL followed alleged mismanagement of about N5.8bn of capital market investors’ funds.
On July 21, 2015 also, BGL obtained another interim injunction by Justice Mohammed Idris stopping the plan by SEC to hear about 40 petitions written against BGL by various investors including the Rivers State Ministry of Finance.
But SEC, which claimed that it had the mandate to protect investors’ funds, had approached the court seeking that the suit be heard during the court’s ongoing vacation.
However, BGL filed a preliminary objection asking that the case should not be heard during vacation, saying there was nothing urgent in the case.
But Justice Mohammed Yunusa, in a ruling on Wednesday, rejected BGL’s preliminary objection, holding that the case deserved urgent hearing.
The judge adjourned till September 4, 2015 to hear the case.
SEC, in its papers filed before the court, alleged that BGL is indebted to various capital market investors, including the Rivers State Government, to the tune of N5.8bn as of June 2, 2015.
The alleged debt, according to SEC, represented return on investments at maturity which BGL allegedly failed to return to capital market investors.
SEC accused BGL Asset Management Ltd of acting contrary to its mandate by “wholly transferring funds received from the investing public to BGL Plc without engaging in any form of Fund/Portfolio Management.”
SEC further claimed that as of December 2014, BGL had run at a loss of over N48bn, adding that BGL had severe liquidity problems.
On the strength of the allegations, SEC had earlier moved to suspend BGL by withdrawing the registration of BGL Plc as a capital market operator.
Albert Okumagba, the company’s officer, was banned from operating as a Registered Sponsored Individual with SEC.
SEC had gone further to give wide publicity to the decisions it made against BGL.
But BGL had approached the court to challenge its suspension.
It urged the court to restrain SEC from further giving wide publicity to the suspension, either on its website or in the newspapers, saying it had been adversely affected and injured in every conceivable manner.
BGL claimed that, “unless the defendants are restrained in the manner sought, no amount of monetary damages will adequately compensate the plaintiffs for the loss that continues to be incurred by them by the defendants’ conduct.”
In its preliminary objection, BGL challenged the jurisdiction of the Federal High Court to adjudicate over the matter.
It argued that by virtue of sections 274, 284 and 289 of the Investment and Securities Act, 2007, the Federal High Court cannot entertain a dispute between a capital market operator and SEC.
The plaintiffs in the suit are BGL Plc, BGL Asset Management Ltd, BGL Capital Ltd, Albert Okumagba, Chibundu Edozie, Teddy Okumakube and Loraine Awoonor-Renner.
Other plaintiffs are Ehime Evelyn Alofoje, Joseph Ashley-Osuzoka, Andre Ewubare, Victor Obire and Nkechi Azubuike.
The defendants are SEC, SEC’s Administrative Proceedings Committee and Director General of SEC Mounir Gwarzo.
By Patrick Aigbokhan