SEC Pays N30m to Investors of Failed Market Operators
The Director General, Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo yesterday disclosed that over N30 million had been paid to about 530 investors of failed companies in the capital market under the National Investor Protection Fund (NIPF) scheme.
The NIPF was launched by commission last year following growing complaints by market investors who couldn’t recover monies invested in bankrupt companies.
The N5 billion-fund is to provide temporary succour to investors who are paid between a minimum of N5,000 and maximum of N200,000 in the event of any failure instead of losing out completely.
Speaking in Abuja at the opening of a two-day workshop on Capital Market Laws, Ethics and Judicial Interpretation for Superior Court Judges which was organised by the commission, Gwarzo said the measure was among other things aimed at boosting investor confidence in the capital market.
He said: “When we launched the national investor protection fund last year in Lagos, we said we’d complains with respect to a particular operator; they collected people’s money and refused to pay them.”
According to him:”Part of the essence of the Fund is to find a way and means that we can temporarily alleviate the sufferings of those investors; not necessarily to pay the investor what he or she had actually lost but to temporarily give the investor some amount of relief and we’ve paid over N30 million to about 530 investors.”
The SEC boss further explained that the commission’s partnership with the judiciary has become inevitable to strengthen market investments.
He said the workshop sought to establish “An excellent collaboration between the regulator and also the judiciary because you can’t down lay the essence of the judiciary especially in terms of investor protection. Investors would be very comfortable that when they invest in the market and they are not able to get what they want, that they have recourse to finding a way and means that their issues can be resolved and the only way such thing can be done is when both the capital market and the judiciary are on the same page.”
He said: “The judiciary needs to understand the workings of the capital market and the capital market also needs to understand the workings of the judiciary-and this is the essence of the collaborations, for us to understand each other better. We’ve been having this programme in the past but for the past four years, Maeve not had it-but we found it very pertinent that we should come together with the judiciary and ensure that we are on the same page.”
Meanwhile, Senate President, Bukola Saraki said the National Assembly would assist to create enabling laws to boost confidence in the nation’s capital market.
Represented at the workshop by the Chairman, Senate Committee on Capital Market, Senator Isiaka Adeleke, he said there was need to improve on strategies for educating the public on market activities to further boost confidence.
Also, the Chief Justice of Nigeria (CJN), Justice Mahmud Mohammed commended the collaboration between SEC and the judiciary.
Represented by Justice Ibrahim Tanko Muhammad, he said a resilient and efficient dispute resolution mechanism was critical for a strong and reliable capital market.
The CJN said the entrenchment of sound adjudicatory processes must be prioritised and seen as a precursor to a world class capital market.
He said: “All over the world, capital markets are principally established to mobilise longterm capital for investment and productive purposes. Capital markets play a very significant role in our society because they enhance industrial growth and aid socio-economic development by expediting the rate of capital formation, fostering free enterprise, promoting creativity, advancement and good governance.
“Nigeria relies heavily on huge amounts of medium and long term funds for infrastructure development. The economy also utilises capital to provide support for entrepreneurship, which in turn promotes growth and creation of opportunities. The Nigerian capital market remains the most important source of these long term funds and has continued to perform its conventional function of mobilising capital for development purposes.”