The Securities and Exchange Commission (SEC) on Wednesday described as false, claims by Ecobank Nigeria Plc that it had replaced shares worth N11 million to Avil Securities Ltd.
Ms Arunma Oteh, the Director-General of the Commission, who disclosed this at a news conference in Lagos, said the commission had yet to receive any formal letter from the bank.
The News Agency of Nigeria (NAN) reports that the stock market regulator in a notice on its website on March 21 announced the suspension of Ecobank from all capital market activities and from being a receiving bank because of irregularities surrounding a margin loan.
The commission said in the circular that an Ecobank client, Arian Capital Management, had used capital from another company as collateral for a margin loan from Ecobank.
SEC said the suspension was imposed on Ecobank Nigeria Plc on Feb. 5, for its perceived connivance with Arian Capital Management Ltd to convert the
555,555 units of First Bank of Nigeria Plc shares belonging to Avil Services Ltd.
Oteh said the suspension of the bank from all capital market activities was valid until it complied with the commission’s order by replacing the alleged shares worth N11 million.
The director-general, who expressed dissatisfaction with the bank’s conduct, advised it to restore the shares instead of responding on the pages of newspapers.
NAN recalls that the bank in a recent statement claimed that it had agreed to replace the N11 million shares in favour of Avil Securities Ltd.
“The bank has since been in formal communication with SEC and has agreed to replace the shares. This has also been duly communicated to SEC and SEC gave Ecobank till April 3, 2013, to replace the shares,” said the statement.
The bank said in the statement that it granted a margin loan facility to Arian Capital Management Limited in 2007, for on-lending, secured by quoted shares.
“The shares were to be in the CSCS account in the joint names of Arian and Ecobank. The margin loan to Arian Capital became delinquent and this debt was sold to AMCON together with the collateral.
“Part of the collateral used by Arian on the CSCS were shares in the name of Avil Services/Arian Capital which Arian moved to the joint account in the name of Arian/Ecobank and which Ecobank transferred to AMCON,” it added. (NAN)