The Lamido Yuguda-led Securities and Exchange Commission (SEC) has been accused by aggrieved voices in the capital market of unlawfully withholding over N12 billion in investor funds that were under its care for several years.
As the capital market regulatory authority, the SEC is entrusted with essential responsibilities, including ensuring the prompt payment of shareholders’ funds and fostering investor confidence in the market.
During the first quarter Capital Market Committee (CMC) meeting held in April in Abuja, Laimdo Yuguda, the director-general of SEC, reassured investors that their interests would be safeguarded throughout all transactions in the capital market.
He emphasized that the commission’s primary duty was to protect the interests of both majority and minority shareholders.
“Protection of investors is the central mandate of the commission and when the commission protects investors; we do not discriminate between minority and majority shareholders,” he had explained.
Recent disclosures from shareholders and operators in the capital market paint a disturbing picture that contradicts the reassurances given.
Under Yuguda’s oversight, the regulator is now facing allegations of violating corporate governance, ethics, and accountability codes—ironically, the very rules it should uphold in the capital market.
THECONSCIENCEng, a Nigerian online news platform, conducted investigations revealing that SEC has been neglecting its obligation to pay shareholders of Dangote Flour Mills their accrued funds for more than two years, citing numerous administrative obstacles. Despite numerous pleas and appeals from affected shareholders, the commission has been unresponsive to their plight.
An unidentified operator in the Nigerian capital market expressed dissatisfaction with the unnecessary hardships endured by shareholders of the former Dangote Flour Mills at the hands of the commission.
“In 2019, Dangote Flour Mills was acquired by Crown Flour Mills and under the terms of the acquisition, shareholders were to be paid the sum of N24 for every share of Dangote Flour Mills held,” the representative said.
“Under the terms of the scheme of arrangements of the acquisition the registrars, EDC Registrars Limited, was to pay the shareholders ab initio, and with a clause that all uncollected monies by shareholders should be transferred to the national investors protection funds by the registrars.
“The national investors protection funds was established by SEC in 2017 and they are to manage the monies.
“Since 2021, however, when the unclaimed money was transferred by EDC to SEC, shareholders who held shares of Dangote Flour Mills, have had excruciating difficulties in getting paid by SEC from the national investors protection funds.
“Many have written series of letters and made calls to registrar and SEC but all to no avail despite several assurances.”
He fervently pleaded for the just compensation of hapless and innocent investors, ensuring that all payments owed to them be promptly delivered.
“By its positioning, SEC should be the one offering succour and confidence to investors not the other way round,” he said.
“But where’s the protection from SEC when two years after collecting investors money, it has refused to release it? This is not a case of ponzi scheme victims paying for naivety, but a case of a regulator who should spearhead corporate governance and accountability.
“The SEC is wilfully denying people what is rightfully theirs. We have suffered in silence for two years and we hope to get succour very urgently.”
TheConscience reviewed several documents, which included a scheme of arrangement of contracts supporting the claims of the aggrieved operators and shareholders. Among these documents, there was a section titled ‘Plan for Untraceable Holders,’ which served as a binding agreement for all parties involved.
“Where scheme shareholders entitled to unclaimed monies remain untraceable twenty-four (24) months after the effective date, the registrar shall transfer all such unclaimed monies to the National Investors Protection Fund in accordance with the directive of the SEC.”
A couple of weeks ago, numerous media outlets disclosed that the commission had not conducted an audit of its financial statements since 2014. However, the commission refuted this claim.
On July 26, TheConscience reached out to the SEC via email for comments on the issue but has yet to receive a response as of the current press time.