SACKED BGL BOSS, ALBERT OKUMAGBA TO ACCOUNT FOR MISSING N16BILLION INVESTOR'S FUND

Sacked boss of BGL Group, Albert Okumagba will be answering questions from relevant authorities as to how over N16 billion disappeared under his watch while he operates the Security and Investment company BGL. This follows the move by the Securities and Exchange Commission (SEC), Nigeria’s apex capital market regulator, to request for the attention of Okumagba and other officials of the group before SEC's Administrative Proceedings Committee (APC).

A circular dated June 25, 2015 available to Journalists indicated that the apex capital market regulator has directed Okumagba and all other SEC-registered officials of the BGL Group as well as the three companies under the group to appear before the APC on August 4 and 5, 2015. The companies involved are BGL Securities Limited, BGL Capital Limited and BGL Asset Management Limited.
Okumagba and others are expected to respond to several allegations of capital market infractions, including earlier investigations by SEC that indicated the group owed investors about N5.8 billion and had accumulated N11 billion in unpaid matured funds to investors.

SEC insisted that Okumagba, other officials and the BGL Group’s companies “remain suspended from all capital market activities”, in addition to the pending hearing at the 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,” SEC stated in a background report on the suspension and appearance at the APC.

The Commission noted that it had obtained a court order from the Investments and Securities Tribunal (IST) and set up a seven-man Interim Management Team (IMT) for BGL Group as 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 and extent of infractions committed by the BGL management.
According to the circular, 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 five-year period totaling about N48 billion as at December 31, 2014.

Also, the investigations uncovered that 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. It was also discovered that the BGL 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. SEC noted that while the Interim Management Team (IMT) and 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). SEC pointed out that since the exparte order has since lapsed, given the provision of the Federal High Court rules regarding all interim injunctions obtained exparte, the suspension of Okumagba, other officials and the BGL’ companies remain in force and they will be further investigated at the APC.