Apex capital market regulatory body, Securities and Exchange Commission (SEC) may suspend Transglobe Investment and Finance Company Limited (Transglobe) indefinitely over unethical practices.

According to a report by Proshare NI, a source made this affirmation to one of its reporters last week.

“SEC would suspend Transglobe over unwholesome practices,” the source reportedly said.

The source further affirmed that the suspension maybe indefinite and would take effect from sometimes next week; after an all parties meeting in Abuja, Nigeria.

It has been reviewed that a lot has gone wrong with the dealing firm under the Nigerian Stock Exchange (NSE).

Transglobe has been found to be illegally trading on shares of most of its clients, including a high profile client through the relationship its General Manager and acting MD/CEO had with a director of a multinational cooperative.

A letter signed by E.A Okolo on behalf of Musa Al-Faki, Director General (DG) of the Commission to the Cooperative and made available to Proshare NI; shows that SEC is currently investigating a case of fraud and misappropriation of funds belonging to the Cooperative of the multi national company by Transglobe.

The letter which was dated February 04, 2009 with reference number SEC/M & I/INVGT/MISC277/09 states that the SEC is currently investigating the case and in order to resolve the issues, has invited the Cooperative to an all parties meeting to be held at SEC’s Head Office on Thursday February 12 2009.

This issue has been raging on close to seven months now; which led to the suspension of Joseph Okolie and Sunny Ameh, acting Managing Director/CEO and General Manager (GM) respectively of Transglobe. It will be recalled that a case of Fraudulent conduct was delivered against the former MD/CEO: Mr. Wilberforce Onwuka.

SEC had on behalf of 31 complainants handed over Onwuka to the EFCC at the end of a hearing involving Transglobe because almost all of the 31 complaints against the company originated during his tenure as an officer of the company and occurred with his personal knowledge.

Currently, It has been affirmed that the firm owes billions of Naira; while its former Management in collaboration with some banks and fund managers made billions of Naira as well through share manipulations and financial engineering…especially on their transactions related to Geofluids Nigeria Limited.

This is coming on the heels of the resignation of two management members of the firm on the grounds of integrity concerns and interference by the Board of Transglobe and its former suspended management members of Joseph Okolie and Sunny Ameh. These members, we understand, are supervised by Mr. Sunny Obidiegwu, supervisory director and cousin of the chairman of the board, Nze Madako.

Prior to this time, the NSE had suspended Transglobe mid-2008 over infractions against its clients which include issuing of dud cheques, purchase of shares with clients’ funds in their names and not in the names of the clients; unbundling of shares purchased in the name of client not credited to the Central Securities Clearing System (CSCS) account but sold through contract notes.

The non-crediting of clients’ shares to its CSCS accounts; the use of funds provided for the purchase of shares for the cooperative, which was alleged not bought or/and unalloted, but for which bonus shares have been discovered in a separate CSCS account.

The use of clients’ funds as lien using fake seals and letter heads of the clients to procure facilities and non-verification of shares certificates of clients’ accounts.

As at the time of filing in this report, Proshare NI could not clarify the true status of the matter when it contacted Lanre Oloyi, Head, Media of the Commission. “I cannot confirm this issue at this moment due to an all parties meeting that has been scheduled,” he said.

Former Wema Assets MD Arrested

The calm that pervades the banking hall of Wema Bank was rustled last week when Mr. Bayo Ogundipe, former President of Wema Asset Management Limited, a subsidiary of Wema Bank was, according to Proshare NI, arrested.

A source close to Proshare NI confirmed that Ogundipe moved to and detained at the Special Fraud Unit (SFU) at Milverton Road, Ikoyi in Lagos, Nigeria.

The source further confirmed to Proshare NI that Ogundipe was held over an alleged fraud of about N1.0 billion perpetrated during his tenure as the Chief Executive at Wema Asset.

Wema Asset had traded as the Trustee and Corporate Finance Division of Wema Bank, and subsequently as Investment Banking, Corporate Finance and Asset Management division under Adebisi Omoyeni, the erstwhile Group Managing Director (GMD) of the Bank.

However, Proshare NI could not gather more details on this, and as at the time of filling in this report, it could not also confirm the true situation from SFU as regards the arrest of Ogundipe.

Sterling Bank’s share reconstruction dust yet to settle

The dust raised as a result of the recent share reconstruction done by Sterling Bank Plc is yet to settle.


This is coming on the heels of investors’ reactions that trailed the banks letter to Proshare NI defending the action.


As published on Proshare’s website on October 30 2008, Sterling Bank explained in summary the whole process of the share reconstruction;


Here are the reactions of investors, some of whom are shareholders of Sterling Bank, in respect of the share reconstruction.


Morris Hill in his reaction expressed doubt on the rational behind the Sterling Bank share reconstruction and has called on regulatory authorities to look into the activities of the bank. While Bello Ahmad Abdulmalik is of the opinion that where such share reconstructions occur, the Nation’s Capital Market is not expected to grow. “How would you expect foreign investors” Abdulmalik said. He further affirmed that there are no regulators in our Capital Market.


Ade Adeoye, a shareholder of the bank in his reaction wished to know those investors that benefited from the additional shares issued.  “How about those who bought the shares after the merger and a day before the closure of register for the reconstruction?” he queried. Adeoye suggested that perhaps, the Directors of the bank sold their shares during the period of the reconstruction.


“This is the more reason information should be made available to the investing public on a timely basis” Adeoye said.


He further affirmed of the need for the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) to clarify the Sterling Bank share reconstruction saga.


“Anyway, it is a known fact that the Nigerian market is a BUYERS BEWARE Market. How else will such things happen?” he wondered.


As earlier reported Sterling Bank had a recent post merger share reconstruction that resulted in the allotment and issuance of additional 13,317,026,285 ordinary shares of 50kobo each ranking pari-passu with existing shares and bringing the Bank’s total issued shares to 23,869,873,936 ordinary shares and thereafter reduced its outstanding shares through reconstruction.


This investors of the bank were not happy with this, but Sterling Bank claimed that the Bank’s shareholders at its 45th Annual General Meeting (AGM) approved the resolution for the reconstruction of the Bank’s shares which was eventually carried out on the ratio of 10 new shares for every 19 existing shares held.

Most investors of the bank became suspicious that despite the shares reconstruction, the impact did not reflect in the price of the Sterling Bank’s stock which, rather than move upward, as expected the stock price hit the dirt.