The Securities and Exchange Commission (SEC) has suspended Ecobank from acting as a receiving banker and from all capital market activities.
In a circular at the SEC seen by BusinessDay, the commission said the suspension was as a result of the role played by the bank in a complaint by Avil Services Limited relating to a margin loan transaction with Arian Capital Management Limited.
The suspension was imposed on Ecobank Nigeria on February 5, 2013 for its alleged connivance with Arian Capital Management Limited to convert the 555, 555 units of First Bank of Nigeria Plc shares belonging to Avil Services Limited.
SEC said: “Under the said transaction, Arian Capital Management Limited (a fund manager) advanced margin loan to Avil Services Limited which was secured by 555, 555 units of First Bank of Nigeria plc shares belonging to Avil Services Limited. At the termination of the margin facility, Avil Services Limited demanded for the lifting of the lien placed on the shares but was informed by Arian Capital Management Limited that the said shares were used as collateral for a ‘Global Margin Facility’ that was granted to it (Arian Capital Management Limited ) by Ecobank Nigeria plc in a tripartite arrangement.”
According to SEC, “Dissatisfied by the explanation offered by Arian Capital Management Limited, the SEC in May 2012 suspended Arian Capital Management Limited from all capital market activities for withholding the said shares and accruals thereon. In July 2012, the SEC pursuant to Section 13 (r) and (t) of the Investments and Securities Act 2007 requested further explanation from Ecobank Nigeria Plc on the consent of Avil Services Limited in the ‘Global Margin Facility’. This explanation is yet to come from Ecobank Nigeria despite repeated demands for it.”
“The suspension will continue to be in force until the bank clears all the issues relating to the use of Avil Services Limited shares as collateral for the Global Margin Facility it granted Arian Capital Management Limited,” noted SEC.