How Lamido Yuguda-led SEC ‘Withholds’ Over 12bn Shareholders’ Funds for Years

By Bolaji Gbadamosi

Aggrieved voices in the capital market have accused the Lamido Yuguda-led Securities and Exchange Commission (SEC) of illegally withholding over N12 billion in investor funds in its care for years.

By law, the SEC is the capital market regulatory authority whose core functions include ensuring prompt payment of shareholders funds and instilling investors confidence in the market.

In April, while speaking in Abuja on the outcome of the first quarter Capital Market Committee (CMC) meeting, Laimdo Yuguda, SEC’s director-general, had assured investors that the interest of shareholders would be protected during all transactions in the capital market.

He noted that protecting the interests of both majority and minority shareholders was the primary responsibility of the commission.

“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.

But recent revelations from shareholders and operators in the capital market about their ugly experiences are a stark contrast to the assurances.

The regulator under Yuguda’s watch is now being dragged for violating corporate governance, ethics and accountability codes, the same rules it should be upholding in the capital market.

Investigations by THECONSCIENCEng, a Nigerian online news platform, revealed that SEC has refused to pay shareholders of Dangote Flour Mills their accrued funds for over two years, citing countless administrative bottlenecks.

This is just as the affected shareholders had made several entreaties and appeals to the commission in order to get paid.

An aggrieved operator in the Nigerian capital market, who asked not to be named, described the difficulties experienced by shareholders of the former Dangote Flour Mills in the hand of the commission as unnecessary.

“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 pleaded that hapless and innocent investors be paid all payments due to them.

“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.”

Multiple documents, including scheme of arrangement of contracts that backed up the aggrieved operators’ and shareholders’ claims, were sighted by TheConscience.

A section of one of the documents tagged ‘Plan for Untraceable Holders’, which binds all concerned parties together, states:

“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.”

Few weeks ago, several media reports revealed that the commission has not audited its financial statements since 2014, a claim the commission later dismissed.

On July 26, TheConscience sent an email to SEC for comments on the matter, but it has not been responded to as of press time.

Bolaji Gbadamosi is the publisher of THECONSCIENCEng, and the National Vice-President, Nigeria Guild of Investigative Journalists.