Economy
Tribunal Slams N5m Fine on Four Stockbrokers
By Dipo Olowookere
Four stockbroking firms have been ordered to pay the sum of N5 million as fine for engaging in illegal transactions.
The four stockbrokers are Gosord Securities Limited, UIDC Securities Limited, Kapital Care Trust Securities Limited and Union Registrars Limited.
They were found guilty of unlawfully selling shares belonging to an investor worth millions of Naira.
The matter was brought before the Enugu arm of the Investment and Securities Tribunal (IST) by the affected investor, Mr Okam Kalu Ugwu.
He joined the Securities and Exchange Commission (SEC), the apex capital market regulator, and the four firms in the suit.
Chairman of the tribunal, Mr Nosa Smart Osemwengie, while ruling on the case, ordered that all irregular transactions in the Union Bank shares variously numbering 9,740 units, 20,740 units, 13,333, units, 9, 740 units, 25,000 units, 16,000, and 12,986 units contained in different share certificates were illegal, unlawful, null and void.
The Tribunal also ordered that the 16,876 units, 5,000 units, 850 units and 2,813 units of Union Bank shares purportedly covered by four other certificates be expunged from the claim, having not been established by credible evidence.
Furthermore, the IST reached the verdict that Union Registrars Limited, UIDC Securities Limited and Gosord Securities Limited are to restore and restitute the claimant with 549,453 Union Bank shares and all bonuses and dividends in line with capital market rules, practice and procedures not later than 30 days from the date of the judgment.
According to a statement issued by the acting Director, Corporate Affairs at the IST, Mr Kenneth Ezea, Union Registrars Limited was equally ordered to restore the name of the claimant, Dr Okam Kalu Ugwu, in the register of shareholders of Union Bank Plc as relate to the disputed shares in line with capital market rules, practices and procedures not later than 30 days from the date of the judgment.
Also, all irregular transactions in the claimant’s Guinness Plc shares covered by certificate number 22279776 were also declared illegal, null and void and Union Registrars Limited (2nd Defendant) and UIDC Securities Limited (3rd Defendants) were ordered to restore and restitute the claimant with 2,083 units of Guinness Nigeria Plc with accrued bonuses and dividends, unlawfully verified, transferred and sold to third parties through their platforms not later than 30 days from the date of the judgment while Union Registrars (2nd Defendant) is to restore the name of the Claimant in the register of shareholders of Guinness Nigeria Plc.
Kapital Care Trust Securities Limited being the 5th Defendant was ordered to restore and restitute the claimant with the 72,151units of Union Bank shares and accrued bonuses and dividends it unlawfully dealt with in line with Capital Market Rules, Practice and Procedures not later than 30 days from the date of the judgment and as well fined N100,000 to be paid into the coffers of the Federal Government of Nigeria for breach of professional ethics in dealing with shares of the claimant.
In addition, the sum of N5 million was awarded as general damages against the Union Registrar Ltd, UIDC Securities Limited and Gosord Securities Ltd jointly and severally in favour of the claimant.
Restating the account of the case, Mr Osemwengie said the action was commenced by way of Originating Application filed by the claimant, Dr Okam Kalu Ugwu, a Medical Doctor, who claimed that he had over a total of 549,453 units of Union Bank shares at all material time to the commencement of the action.
He alleged that a total of 133,078 units of the shares were unlawfully verified, dematerialized and transferred to 3rd parties by some of the defendants without his authority, consent and knowledge.
The claimant alleged further that the Union Registrars Ltd joggled its shareholding such that another 416,375 units of his Union Bank shares cannot be accounted for.
He alleged further that his 2,083 units of Guinness Plc shares were also unlawfully verified, dematerialised and transferred to 3rd parties through the 2nd Defendant, Union Registrars, without his authority, consent and knowledge.
Dr Ugwu informed the court that all his share certificates were kept in his residence at Federal Medical Centre, Umuahia, Abia State and that sometime on the July 30, 2007, he received a caution notice from First Registrars that some of his shares had been provided for verification.
Alarmed that he did not give any instruction on his shares, he raced to where he kept his share certificates only to discover that they had disappeared.
The claimant contended that Union Registrars did not respond to the letter written to it, rather it went ahead and dealt with the claimant’s shares.
As a follow up to the letter already sent to the 2nd Defendant, the claimant, on December 4, 2007, went to the office of the 2nd defendant to demand for details on his shareholding account. The claimant said he met one Mr Akeem who told him to produce copies of the share certificates and dividend warrant stumps to help in reconciling his account. This, the claimant said he supplied to Mr Akeem.
On December 16, 2007, the claimant wrote another letter to the 2nd defendant reiterating his previous demands for details on his accounts, but no response was given. He decided to write a letter dated April 6, 2009 asking the 2nd defendant to place a caveat on his shares.
However, the claimant was surprised to receive a letter from the 2nd defendant in December 2009 purported to have been written to him since December 30, 2008. Enclosed in the letter were purported statement of account of the shareholding with Union Bank of Nigeria Plc dated January 26, 2009 containing 71, 311 units of shares, purported dividend report and CSCS transaction on his share accounts.
The defendants even traced the theft of the share certificates to an in-law of the claimant who was a stockbroker but finding no merits in their defence the tribunal blamed them for failure to exercise caution and apply the standard know your customer precautions even when duly forewarned. They were restrained from further dealing unlawfully with the claimant’s shares.
SEC, being the 1st defendant, was exonerated from liability “From the totality of evidence before us, we do not think the 1st defendant has breached his statutory role as apex regulatory body. We therefore hold that the 1st defendant has performed its duties reasonably well.”
But SEC was directed, under its regulatory powers, to supervise, monitor and ensure compliance by the 2nd, 3rd, 4th and 5th defendants to the orders of the tribunal not later than 30 days from the date of this judgment.
SEC is also to ensure that shares restored and restituted to claimant are moved to the stockbroker company of his choice.
By Adedapo Adesanya
The Dangote Petroleum Refinery has purchased two cargoes of crude oil from the United Arab Emirates (UAE), marking its first-ever procurement of Middle Eastern crude as it diversifies its feedstock sources ahead of continuous expansion.
According to a report by S&P Global Commodity Insights, the two cargoes will be the first sourced by the 700,000-barrels-per-day refinery from any Middle Eastern supplier, signalling a shift from its traditional reliance on Nigerian, African, and United States crude grades.
The report said the purchases followed the resumption of oil exports from the Middle East after the United States and Iran reached an interim peace agreement that restored confidence in shipping through the Strait of Hormuz.
The refinery, designed primarily to process Nigeria’s light sweet crude, has increasingly diversified its crude slate as operations ramp up. The company sources crude from Brazil, Equatorial Guinea, Angola, Algeria, and the US, among others.
The refinery and the Nigerian National Petroleum Company (NNPC) Plc had agreed on the supply of between 13 and 15 cargoes of Nigerian crude monthly in Naira, but the volumes often fluctuate. In May, the state oil company allocated seven cargoes to the plant, up from five in previous months.
The chief executive of the Dangote Refinery, Mr David Bird, had previously disclosed that these constraints had compelled the company to seek additional crude sources outside Nigeria.
According to S&P Global, the refinery has been broadening the range of crude grades it processes as part of its ambition to operate as a fully merchant refinery. The report noted that in 2025, about 70 per cent of the refinery’s crude imports came from Nigeria, while 24 per cent originated from the United States.
The report added that the refinery’s expansion plans would further increase its crude requirements. Dangote plans to double the refinery’s processing capacity to 1.4 million barrels per day by the end of 2028, a level that would enable it to process about 80 per cent of Nigeria’s recent crude oil production in a single day.
Business Post understands that since NNPC cargoes are cheaper for the refinery because of lower shipping costs, importation of crude could translate to higher fuel prices, with Nigerians possibly buying as high as N1,300 – N1,400 at the pump.
By Adedapo Adesanya
The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern that Nigerian consumers have yet to benefit from lower prices despite the recent sharp decline in global crude oil prices.
Business Post reports that crude prices currently trade around $69 and $71 per barrel in the international market.
The commission stated on Sunday that following a market surveillance exercise, the review of gantry prices from local refiners, marketers, depot operators and retail outlets showed only token reductions, not aligned with the steep drop in international crude prices.
The chief executive of the agency, Mr Tunji Bello, said that though the FCCPC does not set petroleum prices in a deregulated market, it is mandated by the Federal Competition and Consumer Protection Act, 2018, to promote competition and protect consumers from unfair business practices.
“To be clear, the commission does not regulate or approve petroleum prices in a deregulated downstream market. Our responsibility under the Federal Competition and Consumer Protection Act, 2018, is to promote competitive markets, prevent anti-competitive conduct, and protect consumers from unfair, deceptive and exploitative business practices,” Mr Bello said.
“We are concerned that while dealers often respond swiftly by hiking pump prices whenever crude prices rise, it is curious that it is taking forever for consumers to benefit significantly when crude prices fall. Competitive markets must work fairly in both directions,” he added.
The organisation noted that crude prices fell to about $73 per barrel after a recent ceasefire between the United States and Iran and the reopening of the Strait of Hormuz, down from a peak near $120 per barrel in April.
During the April–May price spike, petrol prices rose to between N1,350 and N1,500 while diesel traded around N2,000. In February, PMS averaged between N800 and N900. Presently, average retail PMS nationwide is about N1,200, with some local refiners listing gantry prices between N1,025 and N1,075.
The FCCPC acknowledged that domestic fuel prices are affected by multiple commercial factors, including refining costs, foreign-exchange movements, logistics, financing and distribution expenses, but said competitive market dynamics should have passed more of the recent international cost declines to consumers.
“Market liberalisation does not diminish businesses’ obligations to compete fairly or consumers’ right to fair treatment,” Mr Bello added. “Where credible evidence indicates conduct that undermines competition, exploits consumers or otherwise contravenes the Federal Competition and Consumer Protection Act, the Commission will investigate and take appropriate enforcement action,” urging consumers to report suspected anti-competitive conduct, misleading pricing or other unfair market behaviour via its established complaint channels.
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
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