After Five-Year SEC Ban, Arese Ugwu Takes Helm at Nigeria’s OTC Exchange
NASD Plc, Nigeria’s over-the-counter securities exchange, has appointed Arese Ugwu as its acting managing director/chief executive officer, years after she
NASD Plc, Nigeria’s over-the-counter securities exchange, has appointed Arese Ugwu as its acting managing director/chief executive officer, years after she served a five-year regulatory suspension from capital market activities.
In a notice published by the exchange, Ugwu outlined her agenda for the platform. “My vision is to make NASD the market where Nigeria’s great growth businesses find the capital they need to scale and where investors can participate in the value they create,” she said.
NASD operates as a self-regulatory organisation registered with and regulated by the Securities and Exchange Commission (SEC), Nigeria.
The 2017 sanction
Ugwu was among the directors of Partnership Investment Company sanctioned by SEC in 2017. The commission suspended the directors from engaging in capital market activities and barred them from holding directorship positions in any public company in Nigeria for five years. Each was also ordered to pay a penalty of N100,000 for breaching Rule 1 (iii) of the Code of Conduct for Capital Market Operators and their Employees.
The sanctions followed regulatory action involving Partnership Investment Company Plc and Partnership Securities Limited. In February 2017, about 300 investors affected by an alleged N4.8 billion capital-market fraud linked to the companies pledged to recover their investments after petitioning the SEC and the Nigerian Stock Exchange.
One of the affected investors, Arnold Ekpe, reported the matter to the Economic and Financial Crimes Commission, accusing the former Partnership Investment boss of fraudulently converting over N1.2bn and $80,000 due from the sale of 96,077,872 shares of Ecobank Transnational Incorporated Plc to personal use. Other affected investors held equity portfolios with the company.
How the scheme worked
The alleged fraud was said to have been committed under the Partnership Securities Deposit Account platform, a hybrid scheme offering additional gains on shares beyond dividends, bonuses and rights issues. The company reportedly advised clients who were shareholders in various quoted firms to buy into the scheme for an additional 10 per cent return on their investments, payable every six months.
In September 2017, SEC barred Victor Ogiemwonyi, managing director of Partnership Investment Company Plc and Partnership Securities Limited, for life from holding directorship positions in any public company in Nigeria over alleged unprofessional conduct, and withdrew the operating licences of the companies.
