Nigeria’s capital market regulators, the Securities and Exchange Commission (SEC), has suspended the pan-African bank, Ecobank Plc, from all capital market activities.
PANA quotes a statement on the official website of the Commission as saying the suspension ”is as a result of the role played by the bank in a complaint by Avil Services Ltd relating to a margin loan transaction with Arian Capital Management Ltd”.
SEC explains further: ”Under the said transaction, Arian Capital Management Ltd (a fund manager) advanced margin loan to Avil Services Ltd which was secured by 555, 555 units of First Bank of Nigeria Plc shares belonging to Avil Services Ltd.
”At the termination of the margin facility, Avil Services Ltd demanded for the lifting of the lien placed on the shares but was informed by Arian Capital Management Ltd that the said shares were used as collateral for a ‘Global Margin Facility’ that was granted to it (Arian Capital Management Ltd) by Ecobank Nigeria Plc in a tripartite arrangement.
”Dissatisfied by the explanation offered by Arian Capital Management Ltd, the SEC in May 2012, suspended Arian Capital Management Ltd from all capital market activities for withholding the said shares and accruals thereon.”
SEC said it also requested further explanation from Ecobank Nigeria Plc concerning the transactions, but noted that the bank did not respond.
It said the suspension would continue ”until the bank clears all the issues relating to the use of Avil Services Ltd’s shares as collateral for the Global Margin Facility it granted Arian Capital Management Ltd”
The Togo-based bank is the leading pan-African bank with operations in 32 countries across the continent, more than any other bank in the world.