Some investors whose investment in Afroil Plc have been locked in as a result of the full suspension on trading placed on the stocks of the company since June last year, have called on the management of the Securities and Exchange Commission to apply punitive sanction if Skye Bank Plc, issuing house to suspended company and other individuals indicted in the alleged illegal sale of Afroil Plc shares.

The stock of Afroil was one of the cases in exemplary manipulation at the Nigerian Stock Exchange last year. Afroil was an unobtrusive penny stock as of 16 February 2007 it sold at a meager 42k. Then beginning from the day after, 17 February, it rose exponentially to a high of N27.46k before flattening out in the N20 range thereafter.

The Securities and Exchange Commission had expressed strong suspicion over the pricing activities of the stock then and had called for its suspension. The SEC conducted an investigation into the company and the stock market post listing requirements.

Details of the investigations of the SEC were worrisome. Afroil Plc was only masquerading as a listed company; it had indeed lost its legal status as a registered company because it had been wound up by an order of a Lagos court ruling on the request of the company’s creditors for receivership. Yet, for mysterious reasons, the company stock suddenly became the toast of the exchange.

SEC, according to an insider, suspected manipulation and decided to trace the whole bits of under the table deal to the issuing house, stock brokers and fund managers that had something to do with the public offer of the company.

After concluding investigation, the SEC dragged Skye Bank and 13 other individuals and corporate entities before the Administrative Proceeding Committee of the Securities and Exchange Commission, alleging illegal sale of Afroil Plc shares and other violations of the Investment and Securities Act 2007 and the rules and regulations pursuant thereto.

Other corporate entities and individuals suspected to have participated in the illegal sale of Afroil Plc shares and who are made to answer to questions by the Administrative Proceeding Committee are: Mr. Ishaq Olakunle Sanni, K.S. Fund Managers Ltd, Rita Ify Ejezie, Eghosa E. Osaghae, Gbolahan Abiodun Agoro and Alhaji Kassimu Tafida Bakori. Others are: Christopher Elukuemen Olumese, Olusola Badmus, Jonah Unigwe Ikhidero (Chairman of the company 1996/2001), Skye Bank (Issuing house) Reward Inv. & Sec. Ltd (Broker/Dealer), PSL Securities Ltd (Broker/Dealer), and Odili Okechukwu & Co. (External auditor).

The SEC had in a hearing noticed that following the conclusion of preliminary investigations into the affairs of Afroil Plc in respect of the illegal sale of Afroil Plc shares and violations of the ISA 2007 and the Rules and Regulations made pursuant thereto, it has become necessary to invite the persons listed above to appear before the Administrative Proceedings Committee of the Commission to explain their roles (if any) in the matter.” The first set of hearing, which was made between November 26 and 27, concerned investors that have been following the Administrative Proceeding Committee, called for stiff penalties for those found culpable in the Afroil affair.