SEC slams suspension on Heritage, ex-ICAN presidents over shares fraud (Updated)

Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), has slammed an indefinite suspension on Heritage Capital Markets, a stockbroking and dealing firm, over alleged illegal sale of investor’s shares.

In a circular announcing the decision, SEC stated that it has suspended indefinitely Heritage Capital Markets Limited and its directors and sponsored individuals “in connection with the unauthorized sale of shares belonging to an investor and its refusal to comply with the Commission’s directives in that regard”.

The suspended directors and sponsored individuals included two former presidents of Institute of Chartered Accountants of Nigeria (ICAN), Mr. Chidi Ajaegbu and Mrs Ibironke Osiyemi.

Ajaegbu is the managing director of Heritage Capital Markets Limited while Osiyemi chairs the board of directors.

Other suspended directors and sponsored individuals included Dr Elijah Ogbuokiri, Prof Emmanuel Emenyonu, Oluseyi Olanrewaju, Paul Onalo, chief compliance officer and Oyafemi Titus, a stockbroker.

Heritage Capital Markets Limited was incorporated in 1997 and it is licensed by the Nigerian Stock Exchange (NSE), SEC and FMDQ to operate as broker-dealer in the Nigerian capital market as well as offer brokerage services in fixed income securities.

Its official profile indicates that the firm has authorised share capital of N2 billion and shareholders’ funds of more than N1 billion.

“In view of the above, the general public is hereby informed that the suspension is indefinite and shall remain in force pending the resolution of the matter against the operator,” SEC stated.

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Meanwhile, findings by Ripples Nigeria suggest that SEC may have been hasty in applying the suspension hammer, even as the company was in the process of resolving the issues involved.

Inside sources privy to the matter revealed to Ripples Nigeria that the regulator, whether due to a mix up, or communication gap within, ignored correspondents from Heritage informing it of steps being taken by it and members of the family in compliance with SEC’s earlier directives.

The source said, “yes it is true that SEC called them (Heritage Capital Markets Limited) for an all parties meeting to be held on December 8, but I’m also aware that they wrote back that their Managing Director, (Ajaegbu) who is pivotal to the issues, was to perform an important function at the induction ceremony of new members of ICAN which was to hold on the same date.

“They asked for another date for the meeting, but there was no reply from SEC.

“I think they also wrote to the commission twice again after that, asking for appointments to meet over the issue, and for SEC to give interpretations to an earlier directive. But for whatever reason, those letters went unattended to. What followed was the suspension notice”.

Probed further on the root the whole affair, the source disclosed that it was based on an account handled by the company belonging to the estate of the late Prince Cyril Ukachukwu from Imo state.

He stated that the late businessman had four wives and about thirteen children, and that there were disagreements among the family on who should stand as sole representatives over the stocks worth tens of millions of naira.

The source also revealed that the EFCC was earlier called into the matter by some of the family members, and that the anti-graft commission cleared Heritage of any wrongdoing, but suggested that the company assist in transferring the stocks to another house as requested by the family.

According to him, Heritage was in the process of doing this, and informed SEC of it, but again SEC seemed set on a course of action, as it seemingly disregarded every communication from Heritage and came down with the suspension hammer.

 

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