The Federal Ministry of Finance has approved the decision of the Securities and Exchange Commission (SEC) to ban Victor Ogiemwonyi the Managing Director of Partnership Investments Limited and Partnership Securities Limited for life. In addition to the ban, Mr Ogiemwonyi is to pay the sum of N100000.
Chairman of the company, Henry Omoragbon and other board members namely Ojetunde Taiwo, Ogiemwonyi Olufunke, Ogiamien Frank, Adeusi Alexander, and Arese Ugwu, were also suspended from engaging in Nigerian capital market activities for five years and fined N 100000 each.
The penalties were imposed due to a breach of Rule 1(iii) of the Code of Conduct for Capital Market Operators and Their Employees as contained in the SEC Rules and Regulations made pursuant to the Investments and Securities Act 2007.
In addition, SEC has withdrawn the operating licence of the firm and its subsidiary Partnership Securities Limited. SEC also ordered it to restore 48200 Forte Oil shares belonging to Cletus Uchendu that were illegally sold from 23rd May 1997 and the dividends/bonuses that accrued during the period. SEC made the recommendations based on the findings of its Administrative Proceedings Committee (APC) which investigated allegations levelled against Mr Ogiemwonyi by several investors.
Background to the ban
Mr Ogiemwonyi is the founder and MD of Partnership Securities Limited, a stockbroking firm on the Nigerian Stock Exchange. Partnership Securities Limited is a subsidiary of Partnership Investments Limited. His firm was accused of allegedly fraudulently selling shares belonging to his clients and misappropriating the proceeds.
Prominent victims of the alleged scheme include Mr Godwin Anono Chairman Standard Shareholders Association of Nigeria who defrauded of N160 million worth of shares , Mr Arnold Ekpe former Managing Director of Ecobank Transnational Incorporated (ETI) who was allegedly swindled of over N1.237 billion worth of shares.
In addition, over 300 investors in Partnership Investment Company were allegedly defrauded of over N4.8 billion.
In response to the allegations, the Nigerian Stock Exchange (NSE) suspended Mr Ogiemwonyi and the firm. Mr Ogiemwonyi was also charged to court by the Economic and Financial Crimes Commission (EFCC).
Implications of the ban
Mr Ogiemwonyi has been barred from serving on the board of any public company in Nigeria. He will also be unable to practice as a stockbroker, essentially ending his career in corporate Nigeria. Mr Ogiemwonyi has over 20 years experience in the finance industry with stints at defunct NAL merchant bank and Financial Derivatives . He was also a one time council member of the Nigerian Stock Exchange (NSE) and president Association Of Issuing Houses Of Nigeria (AHIN).
Why this is major
The ban by SEC will help instill investor confidence in the market. Prior to this, there had been several instances when the stockbrokers sold clients shares without permission and misappropriated the proceeds. Infractions such as these, have led to apathy towards the stock market by domestic investors.
