The Federal High Court in Lagos on Thursday validated the suspension of BGL Group from the capital market by the Securities and Exchange Commission (SEC).
Justice Mohammed Yunusa nullified an interim injunction barring SEC from expelling the group from all capital market activities over alleged malpractices.
BGL was accused of owing investors about N5.7billion, including the Rivers State Government.
SEC reportedly received about 40 petitions over BGL’s alleged failure to return investments at maturity.
In its preliminary objection to BGL’s suit, the commission said the group was indebted to investors to the tune of N5, 769,993,553.67 as at June 2.
It added that BGL was having severe liquidity problems and has been running at a loss at over N48billion as at last December.
According to SEC, BGL Asset Management Limited, contrary to its mandate, wholly transfers funds received from the investing public to BGL Plc without engaging in any form of Fund/Portfolio Management.
But BGL had on May 27obtained an order restraining SEC from “holding and or conducting any trial or hearing in respect of the alleged complaints against the plaintiff ” and from giving effect to the ban pending the suit’s determination.
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