NIGERIA’S stock market regulator said it has suspended Ecobank from all capital market activities because of irregularities surrounding a loan.
Ecobank runs a subsidiary in Zimbabwe, previously Premier Finance Group which it acquired in December 2010 after injecting $10 million for recapitalisation which gave it 70% ownership.
The Securities and Exchange Commission (SEC) of Nigeria said an Ecobank client Arian Capital Management had used capital from another company without that company’s permission as collateral for a loan from Ecobank.
After suspending Arian, the SEC said it had asked Ecobank for an explanation, but the bank did not reply.
“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,” the SEC statement said.
Ecobank officials were not immediately available for comment.
Ecobank has a presence in 32 African countries and around 9,4 million customers, although its operation in Nigeria, Africa’s second biggest economy, makes up the lion’s share of its business. The bank has its headquarters in Togo in West Africa.
The SEC statement said Arian had taken shares belonging to Avil Services LTD and used them as collateral for an Ecobank margin loan facility without Avil’s permission, withholding the shares and accruals from Avil.
“The SEC . . . requested further explanation from Ecobank Nigeria Plc. This explanation is yet to come from Ecobank Nigeria Plc despite repeated demands for it,” the statement said.
“The suspension will continue to be in force until the bank clears all the issues,” it said. Tim Cocks/ Keiron Henderson