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Stakeholders in Security Market Support bill to prohibit Ponzi schemes in Nigeria

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…. As Reps prescribe 10 years jail term for promoters

By Gloria Ikibah

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Key players in the Nigerian capital market have thrown their weight behind “a bill for an act to repeal the investment and securities and 2007 and enact the investments and securities and exchange commission as the Apex regulatory authority for the Nigerian capital market” and “A bill to repeal the chartered institute of stockbrokers Act CAP. C9, Law of the Federation of Nigeria 2004 and provide for establishment of chartered institute of securities and investments and related matters”.

The bill seeks to among others prohibit ponzi, pyramid schemes and other illegal platforms in Nigeria, it also prescribed a 10 year jail term for the promoters of such schemes.

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Security and Exchange Commission, SEC, the Chartered Institute of Stock Brokers and other stakeholders gave their support at the public hearing of two bills organized by the House of Representatives committee on Capital Market and Institutions to strengthen the sector on Tuesday.

The prohibition of the ponzi scheme comes from the proposed amendment of the investment and security act of 2007.

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Giving his submission, Director General of the Security and Exchange Commission, SEC, Lamido Yuguda commended the Committee and the Parliament for the initiative.

“Having operated the current enabling Act since July 2007, the Commission has observed areas requiring review in order to strengthen existing provisions, remove ambiguities, introduce new provisions that would enhance the international competitiveness of the Nigerian capital market and reposition the market to catalyze National economic transformation.

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“Given the market’s evolution since the passage of the ISA 2007, it was the consensus of the major stakeholders in the capital market community that a complete overhaul of the ISA through a new Bill is necessary in order to achieve the objective of consolidating the efficiency, transparency and viability of the market.

“It is also noteworthy that the Nigerian Capital Market Masterplan (2015-2025), which was launched by the Commission in 2014, strongly recommends the holistic strengthening of the Legal and Regulatory Framework underpinning capital market operations.

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“The Bill expands the definition of a Collective Investment Scheme to include schemes offered privately to qualified investors. Minor reviews on various Sections of the extant law have been carried to provide greater clarity.
Importantly, the Bill introduces an express prohibition of Ponzi/Pyramid Schemes as well as other illegal investment schemes. The Bill also prescribes a jail term of not less than 10 years for promoters of such schemes”, He said.

The DG also said that there was a provision in the Bill with a new stipulation that the Investor Protection Fund set up by Securities Exchanges would compensate investors who suffer pecuniary losses arising from the revocation or cancellation of the registration of a dealing member firm.

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Also supporting the bill, the President of the Chartered Institute of Stock Brokers, Olawale Adeosun said that “in view of our various engagements with the security exchange commission with respect to this bill, the Chartered Institute of Stock Brokers hereby expresses its utmost confidence in the national assembly and this committee to do utmost to facilitate the expeditious passage of an bill.”

The associate of security dealers supported the bill but had some observations about the composition of the Board as the bill provides for 10 member Board.

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“We believe that 10 members is an even number you need an odd number in case there is a tie and we also note particularly that out of the 10, seven are public officers, only two are from the private sector. Our suggestion is that the clause be amended to include capital market operators who indeed understand the market and are in a position to shape the way the market be regulated and guided.

“The second is the impression in that composition that gives more credence to lawyers. We believe that the capital market operators should be given a lot more prominence that the lawyers because that is not a legislative entity, it is a regulatory body. And given that our recommendation is that the number of board be increases to 11 or brought down to nine for membership of the board.

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“The second is with the appointment of the SEC board particularly the requirements that the president appointee to the board be upon the recommendation of the Minister, we believe that will not go well for our market , that SEC should not be tied to the apron string of the Ministry, the SEC should be independent as we have already identified and included in according with international standard as pointed out as the DG”, they said.

President of the Association of Issuing Houses, Aik Chioke, also observed that in section 261(1) there is a requirement for the addition of Custodian.

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“As a party to state bond transactions, we have looked at it as an associate and we believe that the recommendation that the section be deleted or the word Custodian be replaced with trustees. Because it is trustees that normally handle the function in a transaction.

“There is also section 265(2) and there the bill reads a body shall for the purpose of carrying out its obligations under this sub-section shall appoint any registrar, registrar with the commission as registrar and the appointment shall be subject to such terms and conditions as may be deemed fit to the body concerned. Again here we feel that this might be conflicting with the existing procedures for executing transactions of this nature and we are recommending that the section be deleted or the word registrar deleted and replace with an Agent approved by the SEC.

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“Also like to point your attention to sec 268, here there is requirement for the closure of the bond register 21 days to coupon payment date. It read specifically the register shall be closed for a period of 21 days immediately preceding each date on which interest falls due and no transfer should be registered during that period. We believe that this will be quite injurious to the market, to close the bond register and prohibit trading for 21 days before each coupon date would make it 42 days in a year when the body will not be available for trading. This move will be highly detrimental to the trading of corporate bond instruments, hence we recommend that the section be deleted as FGN bonds and equities have no such construct”, Chioke stated.

Declaring the hearing open earlier, the Speaker of the House, Femi Gbajabiamila represented by the deputy majority leader, Hon. Peter Akpatason there was need to ensure investor’s confidence in the market.

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“The need to ensure that the operations of the capital markets and the entire industry sector are sufficiently fair and transparent to ensure investor confidence is of particular concern. It is often said that capital is cowardly and will run at the slightest risk. In this new global economy, when investors have the option to quickly move money across industries, nations and continents, we cannot allow deficiencies in the system that cause investors to worry about the safety of their investments”, he said.

On his part, the chairman of the committee, Hon. Babangida Ibrahim said the bill the “Bill will also achieve expansion of product range in the market, equities, bonds, Sukuk, derivatives and an advent of electronic share issuance”.

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Abuja Court Ruling: Tinubu, Ekiti Gov-Elect, Other APC Candidates Risk Disqualification

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THERE is growing concern in the All Progressives Congress over the judgement of a Federal High Court sitting in Abuja which nullified the nomination of Governor Isiaka Oyetola and his deputy governorship candidate, Benedict Alabi, for the 2022 Osun State governorship election.

Ruling on a suit filed by the People’s Democratic Party challenging the nomination of Oyetola and Alabi, Justice Emeka Nwite agreed with the submission of the PDP on the grounds that Governor Mai Mala Buni who submitted their names to INEC violated the provisions of Section 183 of the Constitution of the Federal Republic of Nigeria and Section 82(3) of the Electoral Act 2022.

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The court declared that Governor Mai Mala Buni acted in contravention of the provision of Section 183 of the Constitution when he held dual executive positions as the Governor of Yobe State and the Chairman of the National Caretaker Committee of APC.

The provisions of Section 183 read in part: “The Governor, shall not, during the period he holds office, holds any other executive office or paid employment in any capacity whatsoever.”

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While the legal representatives of Osun State governor had promised to appeal the ruling, its implication, Sunday Tribune learnt, is already causing panic in the ruling party.

According to legal opinions on the issue, the ruling in its current subsisting nature, means that all actions of Buni while in office as APC acting boss, stand invalidated.

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These actions, include the signing of the nomination of Ekiti governor-elect Abiodun Oyebanji, as APC candidate for the June 18, 2022 poll in the state, the nominations of candidates for other outlier legislative polls, as well as the conduct of the party’s elective national convention which gave birth to the current NWC, among others.

The biggest threat posed by the ruling to APC, is the possible consequential disqualification of all its candidates for the 2023 poll, including the presidential ticket of Senator Bola Tinubu and Kashim Shettima, considering that Adamu’s NWC, conducted the primaries.

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Once the NWC is invalidated by the reason of Buni’s involvement, all actions of the NWC, would be deemed null and void.

Reacting to the unfolding legal drama, constitutional lawyer, Dr Kayode Ajulo, said “It is a plague that could have been avoided if only they took my position on Governor Buni’s chairmanship misadventures serious. But the judgement has vindicated me.”

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In an earlier statement, dated July 31, 2021, he warned that the party could come to greater grief if Buni stayed, considering the subtle warning in the favourable majority decision.

On Saturday, Ajulo referenced the statement which read in part; “Without prejudice to the ratio decidendi of the majority decision of the Court, it is imperative to state pressistimo and very clearly too that with the unanimous position of the Apex Court that it appears the actions of the APC in permitting a sitting Governor as the Interim Chairman of the Party is in violation of the Constitution of the Federal Republic of Nigeria, it is my sincere view that the Interim Chairman of the APC should immediately step down. My humble but cosmic review of the judgment comes with an indication that the Governor of Yobe State, Mai Mala Buni has to vacate his seat, as the Chairman of APC with immediate effect.”

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Breaking down the implication of the Friday ruling, he said if the apex court goes with the decision of the high court, the current National Executive of the party, will have to go.

“If the Supreme Court upheld the judgment, the party’s presidential candidate, Bola Tinubu, and other APC candidates for every elective position will have no business in participating in the 2023 General Election.

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“Can one put something on nothing and expect it to stand? Unless some strategic steps are quickly taken, invalidation of the party’s executives and candidates across all levels will be a great disaster to the APC and could mark its total collapse. This development is a stern warning to politicians to henceforth have regards for law and reasoned thoughts,” he reasoned.

But the National Publicity Secretary of the APC, Mr Felix Morka, a lawyer, dismissed the fears being expressed as misplaced.

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Speaking with Sunday Tribune in an interview, Morka expressed confidence that the judgment of the High Court would be set aside by the Court of Appeal.

He maintained that Justice Nwite erred in his pronouncement.

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He said:” The judgment of the Court is unsupportable. We are confident that the Court of Appeal will upturn the judgment.

“It isn’t supportable by fact of law. What the Governor Buni Caretaker did was ratified by Convention, which is the highest organ of the Party. The Court didn’t avert itself to the fact of the matter.

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“So, there is nothing to worry about. That decision will be challenged and we are confident that the Court of Appeal will upturn it.”

In the Friday ruling, the court, headed by Justice Emeka Nwite, sided with the opposition Peoples Democratic Party (PDP) which initiated the suit, primarily to disqualify Governor Gboyega Oyetola of Osun State, as the candidate of the ruling party in the July 16, 2022 governorship election in the state, eventually won PDP’s candidate, Ademola Adeleke.

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But the suit, commenced on April 7, 2022 may be doing a more significant damage to the fortunes of the ruling party, across board, with the trial judge upholding the argument that all Buni’s actions in office as the party’s acting chair, were null and void.

The party chair, alongside the national secretary, by the dictates of the election laws, signs the nomination of every candidate of the party, before such could be deemed valid, by the Independent National Electoral Commission (INEC).

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With Justice Nwite ruling that Buni, being governor, should not have held another executive position as the acting chair of the party for two years less 25 days.

It will be recalled that Buni, the sitting governor of Yobe State, was sworn in as the acting chairman of the party by the Minister of Justice, Abubakar Malami, SAN, following the controversial ouster of an elected National Working Committee, chaired by former Edo governor, Adams Oshiomhole, by President Muhammadu Buhari-inspired National Executive Council.

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Justice Nwite’s ruling, however, appears in dissonance with the majority decision of the Supreme Court in the appeal arising from Ondo governorship election of October 9, 2020, won by the incumbent Rotimi Akeredolu of APC.

In a razor-thin split decision which favoured him, the apex court held that the conduct of the primary election and nomination of candidates, is an internal affair of a political party, which the judiciary can’t scrutinise.

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The majority decision went further in resolving the appeal brought by Eyitayo Jegede of the PDP that even when a political party is in error of its rules, its internal activities can’t still be challenged. The minority report how- ever ruled that Buni’s acting headship of the ruling party, was an incurable constitutional error, which invalidated Akeredolu’s nomination as the party’s candidate, because it was signed and passed to INEC by Buni.

The minority decision of three justices, out of the seven that heard the appeal, had invalidated Akeredolu’s election victory, because of Buni. While the majority decision didn’t go fully into the con- stitutionality of Buni holding two executive positions at the same time, it ruled that not joining the governor as a necessary party, to argue his case directly, weighed in his favour and by extension, Akeredolu’s.

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The judgement was given on July 28, 2021. Immediately the judgement was delivered, some top party leaders asked Buni to step down, including Minister of State, Labour and Productivity, Festus Keyamo. Buni, aided by his legal team, heavily backed by the deputy senate president, Ovie Omo-Agege, spurned the call.

Keyamo now speaks for Tinubu’s presidential campaign, while serving as minister. Possibly taking its cue from the stance of the majority ruling, PDP, this time, joined Buni as a necessary party in the suit, which was filed almost nine months after Akeredolu’s narrow judicial escape.

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Buni, being joined as a necessary party, must have also emboldened Justice Nwite to go into the merit of the suit, despite the subsisting Supreme Court precedent.

With the appeal arising from the all-important suit expected to advance to the apex court, an opportunity would finally be presented to Buni, to defend himself, and the final court to decide whether he violated the provisions of Section 183 of the Constitution of the Federal Republic of Nigeria and Section 82(3) of the Electoral Act 2022, by accepting the acting appointment while serving as governor.

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Bayelsa Monarch, Ijaw Leader Kick against Alleged Plan to Scrap Amnesty Programme

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By Kayode Sanni Arewa

The Federal Government has concluded plans to terminate the Presidential Amnesty Programme in May 2023, NaijaBlitzNews.com has learnt.

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Our correspondents gathered that the office of the National Security Adviser had directed the Interim Administrator of the Amnesty Programme, Major General Barry Ndiomu (retd.), to commence the process of winding down the programme.

Ndiomu, who was appointed about two weeks ago, replaced the former PAP head, Milland Dikio, although no reason was given for his unceremonious removal which was announced in a statement by a presidential media aide, Femi Adesina.

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The Presidential Amnesty Programme was established by President Musa Yar’Adua’s administration in 2009 as part of the government’s measures to reduce militancy in the oil-rich Niger Delta region.

It was reported that 30,000 former militants had been enrolled into the programme with over 65 per cent of participants said to have been successfully reintegrated

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Despite reportedly gulping over N5 billion monthly, international development consulting firm, Nextier Security, Peace and Development said the PAP had failed to address the various challenges that necessitated its establishment.

The firm, in a report released in 2020, explained that the programme was taking a heavy toll on the revenue of the Federal Government, while rewarding militancy and aggressiveness in the oil-rich Niger Delta.

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However, multiple sources said Ndiomu had been directed to shut down the programme within eight months.

He was said to have disclosed this to the PAP members of staff during a meeting last week.

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A source said, “The interim administrator informed the (member of) staff during a meeting that the ONSA has directed him to wind down the amnesty programme within eight months. In essence, Ndiomu was appointed as the undertaker of the amnesty programme. The workers were shocked and sad to hear the news.

“But there is no justification for the decision because a similar programme to rehabilitate displaced persons in the North has not been shut down. So, why should they shut down the amnesty programme which is empowering many Niger Deltans? This is unacceptable and may spark another round of unrest in the region.’’

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Another source observed that the scrapping of the amnesty programme was not acceptable to the Niger Delta region, saying the fact that the government awarded a N4.5 billion pipeline protection contract to a former militant leader, Government Ekpemopolo aka Tompolo, was not a tenable reason to end the programme.

But reacting to the development, the President of the Ijaw National Congress, Prof Benjamin Okaba, argued that the government should ‘’re-strategise the programme’’ rather than end it.

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The Ijaw leader admitted that the rehabilitation phase of the amnesty programme had not been fully achieved while the training aspect had successfully produced many beneficiaries.

Okaba, however, said whatever failure had been identified should be blamed on those who were in charge of its operations, insisting that the programme itself did not fail.

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According to the INC leader, the disarmament of the militants was one part of the programme that had run smoothly, adding that the rehabilitation phase posed the greatest problems.

Okaba stated, “What I’m saying is that the amnesty programme itself did not fail, it is the operators of the programme that failed. The intentions of (former) President Yar’Adua in putting together the programme was to address the fundamental developmental question in the Niger Delta.”

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‘’So, if they want to scrap it, what is the alternative to the amnesty programme? Now that there is no alternative to the amnesty programme, I think the best option is to re-strategise.”

When contacted for a reaction on Saturday, the PAP spokesperson, Ms Donu Kogbara, promised to respond on Tuesday but when asked to provide an immediate response, she said, “If you are keen to wrap this up quickly, let me see whether I can talk to the interim administrator later tonight or tomorrow,” in a text message.

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The Head, Strategic Communications, ONSA, Zakari Usman, did not respond to calls and a text message sent to his phone on Saturday

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World Bank commits $8bn to Nigeria in 12 months

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The World Bank has committed a total of $7.93 billion in the 2022 fiscal year, which was from July 2021 to June 2022.
Data obtained from the bank’s website showed that this was an increase of 74.67 per cent from the $4.54bn recorded in the 2021 fiscal year, which began in July 2020 and ended in June 2021.

According to the World Bank, commitments covered the total amount of loans for which contracts were signed in the year specified.

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The data obtained ran from 2018 to 2022, covering both loans from the World Bank’s International Development Association and the International Bank for Reconstruction and Development.

Between 2018 and 2022, a total of $38.2bn was committed to Nigeria by the World Bank.

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Within this period, the highest commitment of $10.45bn was in 2018.

Recall that rising debt pushed Nigeria up the World Bank’s top 10 International Development Association borrowers’ list.

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The World Bank Fiscal Year 2021 audited financial statements, particularly the IDA financial statement, showed that Nigeria was rated fifth on the list with $11.7bn IDA debt stock as of June 30, 2021.

However, the World Bank Fiscal Year 2022 audited financial statements for IDA showed that Nigeria had moved to the fourth position on the list, with $13bn IDA debt stock as of June 30, 2022.

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The top five countries on the list slightly reduced their IDA debt stock except Nigeria.

In a statement issued on Thursday by the World Bank, the global lender said it had approved the Nigeria State Action on Business Enabling Reforms Program-for-Results.

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The $750 million IDA credit is expected to help Nigeria accelerate the implementation of critical actions that will improve the business enabling environment in states.

The World Bank Country Director for Nigeria, Shubham Chaudhuri, was quoted in the statement as saying, “Following the significant progress made by states on fiscal reforms through the State Fiscal Transparency, Accountability and Sustainability program, the SABER programme endeavours to offer similar support to the states to undertake critical business-enabling policy and institutional actions that will incentivize private sector development.

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“Private sector investments remain the major vehicle to create more jobs, increase revenues to the states and improve social and economic outcomes for citizens.”

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