SEC Director General Ignores Tribunal Judgment Against FINMAL

SEC Director General has ignored a tribunal judgment against FINMAL.

Newsone reports that the Investment and Securities Tribunal has ordered the Director General of the Securities and Exchange Commission (SEC) to implement the decision against FINMAL to buy back shares and accrued bonus shares belonging to the estate of Late Ambassador Abubakar Garba Gobir that were wrongly sold or risk being committed for contempt.

According to the notice of Consequence of Disobedience of Court Order (Form 48) which was filed at the registry of the Investment and Security Tribunal on the 2nd of November 2023, at our disposal, the DG of SEC may be committed to prison due to inaction of the group chairman of NGX.

The dispute leading to the committal proceedings has a long and chequered history, according to our investigation.

Late Ambassador Abubakar Garba Gobir had shares in various companies before his demise on November 27, 1996. Upon his demise, a letter of Administration was granted over his Estate by the Probate Registry Division of the High Court of Kwara State on August 6, 1997.

Subsequently, one of the heirs was appointed by the Court to manage the Estate in the interest of other beneficiaries.

Sources revealed that the Estate discovered that there had been some underhand dealings with the shares belonging to the Estate, prompting a petition to the SEC.

The petition was investigated, and FINMAL FINANCE & SERVICES Limited and Professional Stockbrokers Limited (her sub-broker) were found to have sold the shares belonging to the Estate on the instruction of some untraceable persons. The value of the shares sold and accrued dividends totaled N170,036,405.79.

According to the sources, despite the directive of the SEC, the boss of FINMAL, who is now NGX group chairman, failed to buy back the shares and failed to pay the dividends to the estate. The Estate has vowed to do all within the confines of the law to ensure that justice is served and the Estate gets what rightly belongs to it.

At this stage, we contacted the counsel for the Estate to shed more light on the dispute and the involvement of the DG of SEC.

According to the counsel, Mr. Ahmed Tafa, “FINMAL FINANCE & SERVICES Ltd was ordered by SEC to buy back the shares wrongly sold and pay the accrued dividend to the Estate of Late Ambassador Gobir vide the letter dated 9th February 2021 on or before March 15, 2021, a directive which FINMAL failed to comply with.

However, FINMAL Finance & Services Ltd, in a letter dated 1st June 2021 and jointly authored by Alh. Umaru Kwairanga and Mr. Adedapo Adekoje, offered to pay the Estate of Late Ambassador Gobir a sum of N90,000,000 in full and final settlement of the indebtedness which accrued from unauthorized sale of the shares belonging to the Estate; the Estate promptly rejected the offer.

Despite a letter of reminder dated 16 June 2021, Newsone Nigeria reports that FINMAL FINANCE & SERVICE Ltd has refused to comply with SEC directives, leading the Estate to approach the Investment and Securities Tribunal to seek redress and hope for closure. The Tribunal, in its judgment dated 6th January 2023, directed SEC to enforce its decision against FINMAL FINANCE & SERVICES LTD.

“The Estate met another brick wall because SEC has refused to comply with the judgment of the Tribunal. The Estate has now resorted to contempt proceedings against the D.G SEC to compel him to comply with the terms of the judgment by enforcing its decision dated 9th February 2021.”

The position of the Estate is buttressed by the process at our disposal which gave the DG SEC notice in the following terms: “TAKE NOTICE that unless you obey the direction contained in this order, you will be guilty of contempt of the court and will be liable to be committed to prison.”

All efforts to reach out to the Director-General of the Securities and Exchange Commission (SEC), Alhaji Lamido Yuguda, to hear his side of the story were unsuccessful, as several attempts to contact him went unanswered.

Our correspondent also gathered that the Managing Director of FINMAL FINANCE & SERVICES is Alh. Umaru Kwairanga, the current Group Chairman of the Nigerian Exchange Group Plc, while Mr. Adedapo Adekoje was at a time the President of the Chartered Institute of Stockbrokers. It is believed that their positions may be responsible for the reluctance of the Securities and Exchange Commission to carry out the order of the tribunal. They seem to be “above the law.”