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Capital Market: BGL Crisis Indicts SEC, NSE – Experts


While many applaud capital market apex regulator, the Securities and Exchange Commission (SEC) for moving against the board and management of BGL Plc, a fortnight ago, the move has been described as an indictment on the regulatory capacity of the commission, as well as the Nigerian Stock Exchange (NSE), the self regulatory organisation (SRO).

According to analysts at Proshare Nigeria Limited, the BGL issue brought to the fore, the apparent lack of political will on the part of the SEC and NSE. This is why, he noted, the matter lingered for so long.

SEC, a fortnight ago, suspended the Albert Okumagba-led board and management of BGL and appointed an interim management committee, following alleged market infractions and other unwholesome activities.

The firm further noted that it was significant that even though BGL Plc was in a dire strait and it affairs needed to be managed properly from a regulatory angle, the self regulation mandate of the bourse meant that BGL Plc, with its subsidiary a dealing member of NSE, ought to be aware or have been made aware of the developments and the question of its trading status resolved.

The NSE, the firm argued, failed to consider it necessary to make a statement on the development at BGL Plc – a development that in time will be considered a defining moment in the Nigerian capital market, for good or bad.

“Why is The Exchange not talking? What are they waiting for,” Proshare queried.

 The firm also considered the timing of the takeover of BGL management, saying that from all indications, the matter leading to the recent regulatory move against the company did not happen overnight.”It had festered over the years, which rightly raises the questions of why the authorities failed to act before now and why they are acting at this moment. Was it a case of regulatory inertia or another of those cases of regulatory accommodation of institutional misbehavior that has continued to ravage the capital market in spite of the changes of 2010 in the leadership of the market, or a case of selective enforcement of the rules? Who is next? What was the rationale used here as a basis for market learning?Albert-Okumagba, CEO, BGL Plc

“The bigger tragedy in the regulatory intervention in the management of BGL Plc is not in the apparent fall of an individual or a firm but in what it reveals about the extant state of our market – operators, investors, and regulators – and its future.

“We whine about the loss of investor confidence and fail to do the simple things that would promote investor confidence. Is it for lack of knowledge or the courage of our conviction? Perhaps the answer can be found in our collective inability to separate the personal from the professional? Time will tell, yet the BGL Plc saga offers more than a test case; it places the SEC and key market leaders, functionaries on trial.”

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