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Tribunal orders stockbroker to refund Nestle investors' N314m
From Mathias Okwe, Abuja
TWO years after it was accused of fraudulently selling Nestle Foods Plc shares worth N314 million, Bonkolans Investment Limited was at the weekend found guilty by the Investments and Securities Tribunal (IST).
The tribunal ordered the Managing Director of the stockbroking company, Mr. Basil Okolie Nkenchor to make restitution to investors who lost their money in the share scam.
A statement by the tribunal's Head of Public and International Affairs, Mr. Kenneth Ezea said sometime in 2002, it was discovered that some stockbroking firms fraudulently introduced some share certificates worth about N314 million, including 3,130,469 units of Nestle Plc shares into the depository of Central Securities Clearing System (CSCS), which were cleared and sold.
Upon this discovery, he further stated, the CSCS alerted the Nigerian Stock Exchange (NSE), which then carried out an in-house inquiry into the incident and found that the Bonkolans Investment Limited through its accredited dealing clerk, Mr. Lawrence Okwufulueze was responsible for the fraudulent sale of the shares. Having ascertained the brokerage house that initiated and executed the fraud, the matter was reported to the police following which those suspected to be connected to it were arrested. But Okwufulueze absconded and has remained at large.
He continued: "The case was reported to the Securities and Exchange Commission (SEC), the apex capital market regulatory authority, which invited Bonkolans Investment Limited and others involved in the matter to its Administrative Proceedings Committee (APC).
"The APC of SEC found CSCS liable because the perpetration of the fraud was made possible through CSCS staff. On appeal to the tribunal, the decision of the APC was upheld.
"However, the CSCS filed a fresh action at the tribunal seeking to be indemnified by the Bonkolans Investment Limited and Mr. Lawrence Okwufulueze for the losses incurred in clearing the shares. The CSCS claimed the company had guaranteed the genuineness of the share certificates and undertaken to indemnify it against all liabilities resulting from the transfer.
"CSCS also prayed the tribunal to order Bonkolans Investment Limited, Mr. Basil Okolie Nkenchor, the Managing Director of Bonkalans Investment Limited, and B & N International Limited (a shadow company owned by Nkenchor) to make restitution to the investors who have suffered losses as a result of the fraudulent sale of the 3,130,469 units of Nestle Foods Plc shares for which Lawrence Okwufulueze acted as agent/servant."
In its judgment delivered by George D.N. Feyii, the tribunal held that the Bonkolans Investment Limited, Okwufulueze, B&N; International Ltd and Nkenchor were liable to make restitution to the investors who suffered losses as a result of the fraudulent sale of the 3,130,469 units of Nestle Foods Plc shares.
The tribunal also directed that: "SEC should include the Bonkolans Investment Limited among the stockbroking firms previously found liable by SEC in carrying out the earlier order of the tribunal in the appeal and in so doing any asset belonging to Bonkolans Investment Limited, Lawrence Okwufulueze, B&N; International Ltd and Basil Nkenchor, which had been identified shall be applied in carrying out this order."`
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