capital market

Supreme Court affirms IST’s Jurisdiction on capital market disputes

Published

1 year ago

April 19, 2023

NewsDirect

By Philemon Adedeji

The Supreme Court has affirmed the Investments and Securities Tribunal’s (ISTs) jurisdiction over capital market disputes in the country.

Director General of the SEC, Mr. Lamido Yuguda, who disclosed this during an interview while reacting to the judgement, said the landmark decision confers exclusive jurisdiction on the IST to determine all issues listed in Section 284 of the Investment and Securities Act (ISA) 2007.

He said, “On January 13, 2023, the Supreme Court of Nigeria delivered a landmark decision with enormous implication for capital market dispute resolution. This was in the case of Mufutau Ajayi vs SEC with Supreme Court number SC/314/2007. Many capital market practitioners have eagerly awaited the outcome of this case which remained pending at the Apex Court for 15 years before it was finally decided.”

The SEC DG stated that the Supreme Court while delivering its judgment in the appeal on January 13, 2023 after going through the facts and history of the matter and reviewing the submissions of the learned counsel representing both parties, found as a fact that the SEC took adequate and sufficient steps to notify the Appellant of the sittings and proceedings of the APC.

He said, “More so, SEC did not act as a judge in its own cause since it acted on a complaint by Sadiq Petroleum Limited (SPNC), a core investor that subscribed 30 per cent of the shares of African Petroleum Plc. Accordingly, the Appellant cannot continue to seek for the grant of the order of certiorari when it was clear that the conditions for the grant were unavailable to him.

“More important however, was the decision of the apex court on the issue of jurisdiction over capital market matters. The Supreme Court held that the main issue in the appeal was that the Federal High Court declined jurisdiction in the matter, which decision was affirmed by the Court of Appeal.”

After reviewing the applicable laws on the actions of the SEC and its Administrative Proceedings Committee APC, the apex court stated, “Based on the foregoing, it implies that any grievance, whether on denial of fair hearing by the APC as in the present case, rule of law, equity, facts or law, etc., should be instituted in the Investment and Securities Tribunal (1ST). It is unequivocal that the proper forum with jurisdiction to hear and determine the case of the Appellant is the Tribunal and not the Federal High Court.

“The above decision of the Supreme Court has finally settled this issue. The jurisdiction conferred on the Investments and Securities Tribunal to determine all the issues listed in Section 284 of the Investments and Securities Act, 2007 remains exclusive and cannot be shared with any other court of law. One of such issues relates to any decision or determination made by the Securities and Exchange Commission in the operation of the Act,” he added.

In year 2000, the National Council on Privatization offered for sale on behalf of the Federal Government 86,400,000 ordinary shares of AP Plc. A year later, (i.e. in April 2001), a core investor of AP Plc alleged in a press conference that the past management of the company had failed to disclose debts of N22.5 billion owed by the company to various creditors. It also alleged that the auditors of AP Plc were negligent in the auditing of the company.

The Securities and Exchange Commission (SEC) set up a Committee to investigate the allegation. The findings of the Committee affirmed that the sum of N10, 181,606 billion disclosed in the prospectus of AP Plc was less than what the company actually owed as at June 30 1999.

Mufutau Ajayi was not a director in African Petroleum Plc but was the company’s Finance and Accounts Manager. The Administrative Proceedings Committee of the SEC found that Mufutau Ajayi, being an officer of AP Plc authorised the issue of the prospectus dated 30th March 2000 which contained an untrue statement to wit: that the total indebtedness of the company as at 30th June 1999 was N10.2 billion whereas subsequent revelations indicated otherwise, thereby contravening the provisions of sections 62 (1), (2) (d) and 63 of the ISA 1999.

Although Mr. Ajayi did not show up at the investigative hearing of the Administrative Proceedings Committee despite being invited, the Committee made the following findings against Mr. M.C. Ajayi namely that: although Mr. Ajayi was not a Director of the company, he was a principal officer who played a major role in obtaining the Commercial Papers (CPs) and Bankers’ Acceptances (BAs) that led to the concealed debt; his conduct prior to the offer for sale by denying the auditors access to relevant financial records during the auditing exercise is very reprehensible and highly unprofessional; that his role bordered on economic and financial crime; and that there was enough evidence to refer his matter to the Economic and Financial Crimes Commission (EFCC).

Consequent upon the above findings, the Administrative Proceedings Committee directed as follows namely that: Mr. Ajayi be strongly reprimanded for his role in the debt concealment; He is therefore disqualified from being employed or participating, in any capacity, in the securities industry; Mr. M. C. Ajayi be referred to the Economic and Financial Crimes Commission (EFCC) for further criminal investigation and action; and the Institute of Chartered Accountants of Nigeria (ICAN) and all professional bodies to which Mr. Ajayi belongs shall be informed of his actions and this Decision.

Upon being notified of the decision of the SEC via a letter dated April 19, 2004, Mr. Ajayi approached the Federal High Court for judicial review of the decision in Suit No. FHC/ABJ/CS/285/2004 – MUFUTAU AJAYI VS SEC & ANOR. The Securities and Exchange Commission through its counsel raised an objection to the jurisdiction of the Federal High Court to hear and determine the case.

The Court upheld the objection and held that the proper venue for the Plaintiff to take the matter to was the Investments and Securities Tribunal and not the Federal High Court.

The Plaintiff being dissatisfied with the decision of the Federal High Court, appealed to the Court of Appeal in Appeal No. CA/A/200/M/2005 – MUFUTAU AJAYI VS SEC. The Court of Appeal affirmed the ruling of the Federal High Court in its judgment delivered on May 8, 2007.

The Plaintiff (now Appellant) took the matter further to the Supreme Court by a Notice of Appeal he filed on August 2, 2007.

capital market

NGX-ASI grows by 0 35%, as GTCO stocks trade high

Published

5 days ago

May 1, 2024

NewsDirect

The NGX All-Share Index (ASI) advanced by 0.35% on Tuesday to close at 98,225.63 basis points.

This is compared to the previous day’s loss of 0.28% to close at 97,879.94 basis points.

Generally, the Nigerian stock market closed positively, gaining 345.69 basis points, reflecting a positive market breadth.

The total volume traded advanced by 99.18% to close at N552.21m, valued at N14.92bn and traded in 9,350 deals. GTCO was the most traded stock by volume and value, with N245.46m and N7.95bn units traded, respectively.

At the close of trading, the market recorded 28 gainers, 18 losers, and 81 unchanged. CAP topped the gainers’ list, while DANGSUGAR topped the losers’ list.

Meanwhile, GTCO had the highest volume, contributing 44.45%, while FBNH and ACCESSCORP followed closely.

The value chart also revealed that GTCO contributed the most, with a 53.26% share.

capital market

Dangote Sugar revenue rise by 20.1% in Q1, 2024

Published

5 days ago

May 1, 2024

NewsDirect

…Targets 700,000MT of refined sugar in 4 years

Dangote Sugar Refinery Plc (DSR) has declared an increase of 20.1 per cent in its revenue in its first-quarter result for 2024.

The company posted a revenue of N122.7 billion according to results shared with the Nigerian Exchange.

This is as the Company also unveiled plans to produce 700,000 metric tonnes of refined sugar from locally grown sugarcane in the next four years, through its Backward Integration Programme (BIP).

Chairman of Dangote Sugar Refinery Plc, Aliko Dangote stated this at the company’s 18th Annual General Meeting (AGM) held yesterday in Lagos.

Dangote, at the AGM, said in alignment with the Federal Government of Nigeria’s policy guidelines, DSR continues to focus on and enhance its Backward Integration Project (BIP) by deploying and reviewing project strategies to ensure efficient delivery.

He noted that the 700,000 metric tonnes would meet 50 percent of the current market demand for refined sugar. According to him, the 10-year sugar development plan to produce 1.5 million MT of sugar per annum from locally grown sugarcane remains a germane roadmap to the attainment of the Company’s objectives.

“Our focus is on achieving the revised targets set for DSR Numan Operations, Dangote Adamawa Sugar Limited, and Nasarawa Sugar Company Limited, while we are hopeful that the Taraba State Government will resolve the community payment issues that have led to the stoppage of activities at the Dangote Taraba Sugar Limited, Lau/Tau project.”

He added that “During the year under review, despite the challenges we were faced with, the company significantly scaled up investment in the Backward Integration Projects with the ongoing expansion of the DSR Numan factory refining capacity from 3,000TCD to 9,800TCD year-end.

“The factory will be increased with an additional 5,200TCD to 15,000 TCD (tonnes of cane crushed per day) eventually to meet the need in view of the massive land development activities also going on at the site. The aim is to achieve 24,200 hectares in total by the year 2029.”

He also emphasised that despite the adverse impact on the business environment by the continuous increase in the inflationary trend, lack of liquidity and FX to fund the company’s equipment import among others for the backward integration projects, concerted efforts are ongoing to secure the needed funds for the development of the Nasarawa Sugar Company Limited project at Tunga in Awe Local Government Area of the state.

“This will enable the company to put in place the needed infrastructure for the eventual commencement of full-scale production and ensure that the Dangote Sugar Backward Integration ‘Sugar for Nigeria Project’ is achieved. In the end, over $700 million investment would be committed to the Backward Integration Programme,” he added.

Dangote said that the Dangote Sugar (Ghana) Limited, was established as a subsidiary of the Company during the year under review, in line with the plan to expand its presence in the sugar industry across Africa.

On outlook, he stated that “achievement of the goals of the Sugar Backward Integration Master Plan remains our focus. This will go a long way in delivering the anticipated benefits, especially in FX savings and cushioning its impact on our operations amongst other benefits to the company, all stakeholders, and the nation.”

Group Managing Director/CEO of Dangote Sugar, Ravindra Singhvi said, “Despite these challenges, we are resolute and focused on the delivery of our business targets in the medium to long term.”

He pointed out that “as we continue to navigate through the scarcity and high cost of foreign exchange, escalating costs of raw materials amongst others, our focus is to enhance the effectiveness of our supply chain processes, optimise cost, improve our operational efficiencies and delivery on our Sugar for Nigeria backward integration project.”

He said, “The target is to produce a minimum of 1.5MT refined sugar annually from locally produced sugarcane at our integrated sugar production estates, which is expected to alleviate some pressure on costs and our demand for foreign currency.

“Achievement of a sustainable business remains one of our key strategies and concerted efforts were made towards sustaining the achievements we have recorded in the past,” Singhvi added.

capital market

Stockbrokers elect Dada as 13th President

Published

5 days ago

May 1, 2024

NewsDirect

The Chartered Institute of Stockbrokers (CIS) has elected Mr. Oluropo Dada, as its 13th President and Chairman of the Governing Council.

This is in line with the Institute’s seamless succession policy, and brand positioning.

Dada’s election was announced in a statement, signed by the Institute’s Registrar and Chief Executive, Mr Josiah Akerewusi, after the Annual General Meeting (AGM) yesterday.

Dada, the Institute’s former 1st Vice President, succeeded the erstwhile President, Mr. Oluwole Adeosun, whose tenure was characterised by many laudable achievements.

Under the new change of baton, the Institute’s 2nd Vice President, Mrs Fiona Ahimie, has also emerged the 1st Vice President.

By the Institute’s tradition, Dada shall be formally decorated with the paraphernalia of office in a high profile event called investiture at a later date.

Earlier in his statement, during the AGM, Adeosun thanked all members of the Institute’s working committees and staff of the secretariat for their commitment and excellent job during the review period, saying, “ I re-affirm that the Governing Council and Office Holders shall continue to work hard towards getting the Securities and Investment profession registered family in the hearts of young Nigerian scholars as their career of choice, and CIS as the model for other professional bodies to follow.”

Stockbrokers showered encomiums on the outgoing President and his Team for many laudable achievements that have raised the bar, including advocacy.

A Past President, Mr Oladipo Aina said: “A lot has been done. I wish the outgoing President well. The new Team must deliver more. Every new President and his Team must move the scale up.”

Mr. Oluropo Dada, is an accomplished stockbroker, consummate banker, and a Dealing Clerk of The Nigerian Exchange Limited (NGX). He is a Fellow of the Chartered Institute of Stockbrokers (FCS) where he served as Second and First Vice President respectively. He is also a Fellow of the Chartered Institute of Bankers of Nigeria (FCIB).

Dada graduated from Leeds Business School of Leeds Beckett University, United Kingdom where he obtained a Master’s Degree in Corporate Governance. Before this, he was at the University of Lagos between 1985 and 1988 where he obtained a Bachelor of Science Degree in Business Administration and later earned a Master in Business Administration (MBA)

He is a co-founder and Chief Executive Officer of Network Capital Limited, a Dealing License Holder of the Nigerian Exchange Limited. His work experience covers Stock broking, Issuing House Activities, Credit Appraisal, Accounting, Investment Advisory Services, and General Administration.