Mr ''FIX IT'' at work again. When will this ever end.There goes the rule of law. By Bassey Udo
September 10, 2009 06:43AMT
The Investments and Securities Tribunal, yesterday gave a clean bill of health to Nova Finance & Securities Limited and Eugene Anenih, its Managing Director, over recent allegations of manipulation of the share price of African Petroleum (AP) Plc at the stock market.
No share manipulation
In the judgment read by by Wilfred Ikatari, on behalf of its Chairman, Nnenna Orji, the securities tribunal declared: "There was no manipulation of AP Plc's share price by Nova and Anenih," and granted all the reliefs, setting aside and vacating the sanctions, which the Securities and Exchange Commission had placed on the accused.
The judgment also read in part: "The regulator(Securities Commission) neither held any criminal trial nor meted out criminal sanctions on Nova and Anenih, adding that they were not given fair hearing, as no adequate notice and opportunity was given for them to defend themselves before serious sanctions were imposed on them."
AP keeps mum for fear of sanction
Tunde Falasinu, the Chief Operating Officer of AP refused to react to the tribunal's judgment, saying: "I do not have any reaction or response. I am not aware of the judgment. I was not even aware that there was any case in court. If there will be any response, it should come from SEC. When AP management reported the manipulation of the company shares, the same SEC said we went to the press with the information, and the company was asked to pay a fine. So, I do not want to be asked to pay another fine. Let SEC react," he told NEXT yesterday on the telephone.
The AP shares manipulation saga brought to the fore the disintegrating relationship between former bossom friends, A.P majority shareholder, Femi Otedola and business mogul Aliko Dangote. Mr Otedola accused Mr. Dangote of being behind the manipulation that led to a dive in the price of AP shares through Nova Securities.The Securities Commission which found Nova Securities guilty of malpractice, however absolved Mr Dangote of any wrong doing.
Both Mr Dangote and Mr Otedola have filed suits against each other in the courts claiming various damages. It is unclear what the status of the suites are, but several newspaper reports have reported that the two were recently reconciled through the mediation efforts of mutual friends.
Commission undecided about reaction
Lanre Oloyi, spokesman for the securities commission, was also not forthcoming on whether it will contest the tribunal's decision.
"SEC is yet to be served with a copy of the judgment. Whenever that is done, management will review along with the guidance of the Commission's legal Counsel before issuing an appropriate response," Mr Oloyi told NEXT on the telephone.
Case against the accused
The Securities and Exchange Commission, the capital market regulator, in April, sanctioned Nova and Mr. Anenih, following allegations by the management of AP that they manipulated the company's share price through continuous cross deals involving 50,000 units of Aliko Dangote shares between February 11, 2009 and March 20, thereby resulting in the fall in the value of the equity.
SEC findings
The Commission at the end of its investigations on April 3, alleged that "Nova Finance and its Managing Director employed manipulative and deceptive devices and contrivances in its transactions on AP Plc shares between February 11 and March 20, 2009, contrary to rule 110(1) (d) of the Rules and Regulations of the Commission." It further said, "Nova Finance and its Managing Director manipulated the market by engaging in transactions, which had the effects of lowering the price of AP shares on the Nigerian Stock Exchange, contrary to Section 106 of the ISA 2007."
Sanctions against Nova Securities
Consequently, the commission slammed a one-year suspension on Nova Securities from all capital market activities, with effect from April 16, 2009, in addition to a fine of N190,000.
Mr.Anenih, the company's chief executive was also sanctioned and disqualified from being employed in any arm of the securities industry for five years, until April 16, 2014. He was also asked to pay a fine of N190,000 (N5,000 per day for 38 days), apart from being referred to the Economic and Financial Crimes Commission (EFCC), for further interrogation and possible prosecution for violating Rule 177 and the code of conduct for market operators.
Appeal
Nova and Anenih, in May, filed an appeal before the Securities Tribunal, demanding not only a declaration that the commission's actions were a violation of their right to fair hearing as guaranteed under Section 36 of the Nigerian Constitution, but also an order setting aside the decisions by the regulatory body.
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