Cadbury Plc, Akintola William And Union Registrar Hammered By Sec

FINAL DECISION on CADBURY
Dear olufemi,

The Securities and Exchange Commission (SEC) has released its final decisions on the financial mis-statements in the published annual Accounts and Reports of Cadbury Nigeria Plc between 2002-2005.

It would be recalled that the Commission In June 2006 received a copy of Cadbury’s Annual Reports and Accounts for 2005. Upon review of the report, the Commission wrote to Cadbury via a letter dated September 22,2006 to express concern on issues arising from the report in the areas of declining profitability, worsening leverage ratio, deteriorating cash flow, inadequate disclosure, non-compliance with Corporate Governance Code, and obtaining loans for the payment of dividends to shareholders contrary to SEC regulations.

Thereafter the Chairman of Cadbury Nigeria Plc,Rt. Hon. Uduimo Itsueli through a letter to the Commission dated November 16, 2006 reported the engagement of an independent firm, PriceWaterhouseCoopers (PWC), to investigate the allegation of overstatement in the company’s Financial Statements for the period 2003 to 30th September, 2006.

Subsequently, the Commission constituted an in-house Committee which carried out a thorough investigation on the matter and confirmed the report of misstatements in the account of Cadbury to the tune of approximately N13 billion.

Consequently, the directors, some management staff of the company,its external auditor, Akintola Williams Delloite (AWD) and the Registrars, Union Registrars Limited were invited before the Administrative Proceedings Committee (APC) of the Commission to explain why sanctions should not be imposed on them for violating the provisions of the Investments and Securities Act 1999, the SEC Rules and Regulations 2000 (as amended), Code of Conduct for Capital Market Operators and their Employees and the Code of Corporate Governance in Nigeria.

The APC sat on May 21, 2007, February 13 and 14, 2008 to hear the matter. At its sitting on March 27 and 28, 2008, the Committee made the following findings and decisions among others:

FINDINGS:
CADBURY NIGERIA PLC AND ITS DIRECTORS
1. That the Bunmi Oni, the company’s former managing director in concert with the company’s Board since year 2002 used stock buy backs, cost deferrals, trade loading and false suppliers stock certificates to manipulate its financial reports that were issued to the public and filed with the Commission.
2. That both Bunmi Oni and Ayo Akadiri,a former executive director stated that the use of the sale and stock buy-back as well as the issuance of false stock certificates schemes were motivated by what they called “profit management desire/action” and that off-shore payments were made to Executive Directors to cushion the devaluation of their pay by soaring inflation.
3. That an undocumented and undisclosed offshore account was maintained and operated by the company from which Bunmi Oni, Ayo Akadiri and other executive directors were paid offshore remunerations without the approval of the Committee responsible for fixing remunerations of Executive Directors and not recorded in the company’s financial report and account.
4. That the company as Issuer and Uduimo Itsueli, Bunmi Oni and other members of the board, some management staff and audit committee members, in 2005 authorized the issuance of a Rights Circular dated August 24, 2005 which contained untrue statements.
5. That Bunmi Oni, Ayo Akadiri, Olusegun Aina, Senior financial Accountant/Head of Accounts; Akinbode Gbolahan, Sales operations and development controller and Tunde Egbeyemi, head of internal audit were the master minds of the financial malpractices perpetrated through the falsification of sales figures, over statement of profits/assets and false suppliers certificates to manipulate its financial records/report.
6. That the company failed/refused and/or neglected to deliver funds en-bloc to Union Registrars for the payment of dividends declared to shareholders within 7 working days after the Annual General Meeting.
7. That Uduimo Itsueli, the company’s chairman stated in the 2001 annual report and account that the company had taken over the payment of dividend and this continued up to 2006 despite the Commission’s letter directing it to allow the Union Registrars Ltd to perform its statutory function.
8. That messrs Olusegun Aina, Akinbode Gbolahan and Tunde Egbeyemi being heads of accounts, sales operation and internal audit respectively generated incorrect data and were also involved in the preparation of the false report and statement filed by the company with the Commission.
9. that messrs Thomas A. Ayorinde, Z.C. Enunwa and S.J. Balogun as members of the Audit Committee of the company failed and neglected to discharge their statutory responsibilities as specified under section 359(4) and (6) of the Companies and Allied Matters Act (CAMA) by:
a,  Failing or neglecting to examine the auditor’s report and making proper recommendations thereon to the Annual General Meeting;
b,  Failing or neglecting to review and make proper findings on management matters in conjunction with the External Auditors and departmental responses thereon;
c,  Failing or neglecting to keep under review the effectiveness of the company’s accounting and internal control system and ensuring that appropriate investigations are carried out by the internal auditors into some aspects of the company’s activities which ought to be of interest or concern to the Committee.
10. That the Tunde Egbeyemi, Cadbury’s Head of Internal Audit, Thomas A. Ayorinde, Z.C. Enunwa, S.J. Balogun (Audit Committee Members) and Akintola Williams Deloitte did not follow up available leads which ought to put them on enquiry in respect of the company’s accounts.
11. That Uduimo Itsueli, other board members and the three management staff of the company- Olusegun Aina, Akinbode Gbolahan and Tunde Egbeyemi used stock buy backs, cost deferrals, trade loading and false suppliers stock certificates to manipulate its financial reports which conduct is fraudulent and needs to be further investigated by the Economic and Financial Crimes Commission (EFCC).

EXTERNAL AUDITORS- AKINTOLA WILLIAMS DELIOTTE (AWD)
1. That Akintola Williams Deloitte (AWD) is a registered market consultant, in the capacity of External Auditor/Reporting Accountant and subject to the SEC Rules and Regulations and the Code of Conduct for Capital Market Operators and their Employees made pursuant to the Rules.
2. That AWD, one of the leading and most experienced accounting firms in the country were external auditors to the company for over 40 years.
3. That AWD has about 40 partners and audits the accounts and serves as reporting accountants to many big companies in the capital market.
4. The APC of the Commission found that N13.255 billion was the accumulated overstatement for the years 2002 to September 30, 2006 and that AWD audited the published accounts for those years as well as carried out an interim audit for the period ended September 30, 2006.
5. That a balance of N7.7 billion was credited to the company’s account in 2005 without confirmation of the bank balances from any of the banks. AWD did not make any note in the 2005 audited account that it did not receive confirmations from any of the banks for the balances recorded against such banks. The materiality of the amount is significant enough to have put AWD on enquiry.
6. That AWD sent Management letters on the company’s 2001 to 2005 accounts, yet they failed or refused to note the lapses in the accounts when no satisfactory response was given by the company’s management.
7. That in carrying out its job as Reporting Accountants in the Rights Issue of 5 billion irredeemable loan stock, AWD reviewed the accounts and forecasts of the company’s following which it filed with the Commission a memorandum of profit forecast that was unrealistic.
8. That though Auditors normally rely on documents presented to them by clients to do their work however they are required to probe further when put on inquiry as shown by the stock certificate of N700 million allegedly issued by JOF Limited but disclaimed in writing by the alleged issuer, which was large enough to make AWD seek further confirmation but it did not.
9. That professional skepticism generally requires that an auditor should not believe documents presented by a client till it sees evidence that they are genuine. In the company’s case, AWD did not probe further or doubt documents presented by the company in spite of the internal control lapses detected and revealed in its management letters.
10. That AWD and in particular the partners that handled the company’s account did not carry out their assignment with high level of professionalism and diligence expected of a reputable accounting firm of its caliber

UNION REGISTRARS LTD
1. That Union Registrars Ltd is a registered market operator in the capacity of Registrars and is subject to the SEC Rules and Regulations and the Code of Conduct for Capital Market Operators and their Employees made pursuant to the Rules.
2. That Union Registrars took over as Registrars to the company from United Securities Limited on June 1, 2002.
3. That the payment of dividends to shareholders is one of the statutory responsibilities of the Registrars.
4. That Union Registrars neither paid nor dispatched dividend warrants to shareholders of the company.
5. That Union Registrars and all capital market operators have a duty to report to the SEC any actual or suspected breach or infringement or non-compliance with any of SEC rules and regulations.
6. That Union Registrars failed to pay dividend on behalf of the company till 2006 and 2007 which was not reported to the SEC the non-compliance by the company of SEC’s earlier directives on the issue.
7. That Union Registrars was printing dividend warrants for the company while the latter was dispatching and paying same.
8. That Union Registrars did not pay dividends and failed to notify SEC in writing as stipulated by the Code of Conduct for Capital Market Operators and their Employees.
9. That Union Registrars engaged in acts that adversely affected the investors’ confidence in the capital market.

DECISIONS.
1. Cadbury Nigeria Plc to:

a. Pay a fine of one hundred thousand Naira (N100,000.00) in the first instance and a penalty of five thousand Naira (N5,000.00) per day from June 30, 2002 to December 14, 2006 within 21 days from the date of the decision (March 28, 2008) for filing with the Commission, financial statements that contained untrue/misleading statements; failing which trading on its shares will be suspended.
b. Pay a fine of one hundred thousand Naira (N100,000.00) in the first instance and a penalty of five thousand Naira (N5,000.00) per day from August 24, 2005 to the date of the decision (March 28, 2008) within 21 days, for filing a Rights Circular for the N5 billion irredeemable convertible loan stock which contained false/misleading statements, failing which trading on its shares will be suspended.
c. Pay a penalty of five thousand Naira (N5,000.00) per day from June 30, 2002 to December 14, 2006 within 21 days from the date of the decision for failing to provide funds en-bloc for the payment of dividends to its shareholders despite the Commission’s earlier directive.

2. Messrs Bunmi Oni and Ayo Akadiri are: Banned from operating in the Nigerian capital market, being employed in the financial services sector and holding directorship positions in any public company in Nigeria.

3. The Messrs J.S.T. Bogunjoko, Abiodun Jaji, Andrew Baker and Christopher Okeke are: Suspended from operating in the Nigerian capital market, being employed in the financial services sector and holding directorship positions in any public company in Nigeria for a period of 5 years from the date of the decision.

4. Olusegun Aina, Akinbode Gbolahan and Tunde Egbeyemi were: Suspended from operating in the Nigerian capital market, being employed in the financial services sector and holding directorship positions in any public company in Nigeria for a period of 3 years from the date of the decision.
5. Rt. Hon. Uduimo Itsueli, Messrs Olatunde Falase, Raymond Ihyembe, Gabriel Onabote, Olusegun Oyewole, Matthew Shattock, Thomas Ayorinde, Z.C. Enuwa and S.J. Balogun are:
Suspended from operating in the Nigerian capital market, being employed in the financial services sector and holding directorship positions in any public company in Nigeria for a period of one year from the date of the decision.
6. Messrs Cadbury Nigeria Plc, Rt. Hon. Uduimo Itsueli, Bunmi Oni, Ayo Akadiri, J.S.T Bogunjoko, Abiodun Jaji, Andrew Baker, Christopher Okeke, Olatunde Falase, Raymond Ihyembe, Gabriel Onabote, Olusegun Oyewole, Matthew Shattock, Olusegun Aina, Akinbode Gbolahan and Tunde Egbeyemi have been referred to the Economic and Financial Crimes Commission (EFCC) for further investigation and prosecution.

7. Akintola Williams, Deloitte is:
a. Ordered to pay a fine of twenty (20) million Naira within 21 days of the decision for its failure to handle the accounts of the company with high level of professional diligence failing which its registration with the Commission shall be cancelled.
b. Strongly reprimanded and warned to desist from engaging in acts that may affect the investing public’s confidence in the capital market.
c. Strongly advised to be more diligent in carrying out its assignments in capital market related issues.
d. Further directed to sign an undertaking to be diligent and of good behaviour in its future dealings in the capital market.

8. Union Registrars Limited is:
a. Ordered to pay a penalty of five thousand Naira (N5,000.00) per day from June 1, 2002 to June 31, 2006 within 21 days of the decision, failing which its registration with the Commission will be cancelled.
b. Strongly reprimanded and warned to desist from engaging in acts that may affect the investing public’s confidence in the capital market.
c. Strongly advised to be more diligent in carrying out its assignments in capital market related issues.
d. Directed to sign an undertaking to be diligent and of good behaviour in its future dealings in the capital market

This punishment is not enough.

Good. I will make my opinion on the recommendation known soon.

Sarbane-Oxley Act 2002 prohibits auditing firms from having any non-audit dealings with their clients because this will affect their independence. This is the case of AWD- acts as both external auditor and reporting accountant to Cadbury. Will they see anything wrong when they get other revenue from Cadbury?

I hope this will not turn into another Enron-Aurther Anderson saga.

As per the punishment, SEC should know better.

Let us wait for the aftermath of the judgement as regard AWD credibility as auditor.

RE: FINAL DECISION ON CADBURY
Its' a great pleasure for me to express my opinion on the above issue. This is a development that shook the entire economic landscape of not only Nigeria but Africa as a whole. The development is reminiscent of the popular “Enron Saga” and “WorldCom”. It’s no surprise that it has now been known as “the Cadbury Saga”.

Though misstatement of accounting records did not start in this part of the world, the incident caused a shock to us ALL especially the professionals including external auditors. Going through our legal records, investors and other users of accounting records are not known to have sued the external auditors and/or company management, although our legislation created rooms for such. We are indeed not better than how the late Afro King described us – “suffering and smiling”. Investors in this part of the world have created an impression that our corporate governance is effective.

We have recorded accounting records falsification even in the most developed economy of the world, including the United States. Corporate governance has been abused even in the United States with all its volumes of code of corporate governance. We are still at loss as to how these companies were able to over state their profits without eyebrows being raised by “financial experts” in the US.

The American Legislators were so concerned and disturbed like most of us. They evaluated the effects of this saga on investors’ confidence in the American economic and investment environment. As s result, an Act – SARBANES OXLEY was passed to impose additional responsibility on company management and external auditors. The Act further imposes additional disclosure requirement and punishment for erring managers and external auditors. The most obvious of the provision of this act is the creation of an “oversight board” to register, regulate, control and monitor the conducts of the external auditors, ensuring that they comply with every letter in the Act. The purpose of all these is to protect the innocent investors, ensuring effective corporate governance, and introducing “checks and balances” for all players.

In the light of the above, the “Cadbury Saga” imposes great challenges on our market regulators to take drastic measures to ensure that such unethical practice does not occur any more, that investors’ interest is protected, that corporate governance is strengthened, and that all players play according to the stated rules. The regulators needed to wade into the saga to “rebuild investors confidence” in the Nigerian Stock Market. Though I have maintained consistently that “window dressing”  has been adopted by some company managers to post robust result/performance to the detriment of unsuspecting investors, no one could imagine that a company with great tradition and reputation built over the years like Cadbury could be caught in the web.

Having said this, the regulators especially the SEC (Securities and Exchange Commission) swiftly moved into action by setting up an Administrative Proceedings Committee (APC) to among others, investigate the extent of misstatement, the culprit(s) in the misstatement and recommend adequate sanction where appropriate in line with the provision of the Investments and Securities Act 1999, SEC Rules and Regulations 2000, code of conduct for Capital Market Operators and their employees and the Company and Allied Matters Act 1990.

The APC made its findings and decision public on 28 March 2007. Sequel to making the statement public, reaction has been instantaneously diverse. However, it is my intention here to comment on the report as made public. Some of the questions to be answered in this piece are, whether the findings are comprehensive and thorough. Whether the APC’s report can stand the test of critical attack. Whether the proposed sanctions are adequate enough to deter future occurrence. Whether the report can bring back investors’ confidence on the Nigerian Stock Market and management ability of quoted companies’ management teams.

To answer the questions above, it’s pertinent to summarise the report, and bring out the salient points in the report. The committee reported both its findings and its decisions most probably based on the findings. Some of the findings are stated inter alia and my opinion on each of the findings are interspersed in italics and boldened:

1.   The Board used stock buy backs, cost deferrals, trade loading and false suppliers certificate to manipulate financial reports

This is an unethical practice by some companies’ management to reduce cost of sales and expenses with the sole aim of reporting higher profit. Stock buy backs on the other hand, puts artificial pressure on demand for stocks at the stock market with the consequence of artificial capital appreciation. In effects the values of Cadbury shares were overstated. The APC did not state the role of the external auditors in the cost deferrals.

2.   That the company’s offshore accounts were not documented and disclosed in the in the company’s records. That payment out of the accounts was not approved by the responsible committee.

A fraud is usually measured by the intention to misstate, not to disclose any financial information in order to obtain an advantage there from. The action of the executive directors in this regard cannot be viewed in any other way(s) than fraudulently motivated. It’s more worrisome when taking in the context that responsible committee did not approve the withdrawal from the accounts. Am of the candid opinion that all the directors that benefited from the accounts must be made to return whatever they have benefited individually and collectively.

3.   That the company and its chairman issued a right circular which contained an untrue statement.

Though the APC did not quantify or state the extent of the untrue statement, it is however logical to conclude that anything done on nullity is a nullity because something cannot stand on nothing. Since the account is incorrect, every other thing done in respect of that account is conclusively incorrect. Therefore, SEC should invoke the provision of the ISA to punish all that certified the statements to be true when they knew that the accounting data were not true.

4.   That the company failed or neglected to make fund available en-bloc to the company’s registrar for payments of dividend within the stipulated time by the statute.

5.   The company’s accounts department, sales operation department and internal audit department generated incorrect data and prepared the false reports.

Internal auditors are expected to ensure that companies’ policies are adhered to and complied with in the processing of transaction, recording the transaction and generating reliable accounting information. It’s a widely held notion that no internal control no matter how effective can prevent fraud especially in the face of collusion by employees. The APC having found the head of audit culpable in the falsification of accounting records, suggests that internal control over accounting records were not effective and in fact non-existent

6.   That the Company’s Audit committee failed and neglected to perform its statutory function.

Am so disappointed that chartered accountants in the committee could live up to their billings. Thomas A. Ayorinde is a reputable chartered accountant and a principal partner of a firm of chartered accountants. If was a member of such committee and could not act within the provision of CAMD then nothing more would be tenable than collusion between the committee, external auditors and the management.

7.   That the Audit Committee and the External auditors did not act as appropriately when put on enquiry.

My response above refers.

8.   That the conducts of the board members and three management staff is fraudulent and criminal. That the EFCC should further investigate.

I think that investors and shareholders can also sue in Tort. How we greatly miss the ebullient and ever indefatigable Asalu Akintunde (RIP)

9.   That Akintola Williams Delloitte (AWD) is the external auditors to the company for over forty years now.

I think it’s high time we took rotation of external auditors more seriously. We were taught by ICAN that familiarity might be a risk to auditors’ objectivity. Having been involved as external auditors for 40 years, it’s natural that the auditors think they know the client “too well” and placing and undeserved reliance on their accounting system.

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10.    That AWD were the external auditors when the company’s profit was overstated to the tune of N13.255 billion between 2002 and September 2006 financial periods.

Here, we deserve an oversight board as we have in the US to review the audit work papers of the external auditors to ensure that they complied with all professional and legal guidelines and the firm’s internal quality control in the expression of their professional opinion on the set of accounts of their clients.

To achieve this, I hold the opinion that the legislature reviews the CAMA 1990 and puts the external auditors under the watchful eyes of an oversight body. Also, ICAN should be more up and doing in the review of members’ audit work papers to perform this oversight function. Alternatively, ICAN should mandate all professional firms register with the Public Practice Section of the Institute. On no account should a firm exempt itself from the membership of the section. The section should also be empowered with supervisory roles and reports to the Disciplinary Committee of the institute about any misconduct by a member.

11.   That AWD failed to report in its Management Letter that it did not receive a confirmation of N7.7 billion naira credited in the account from any of the company’s banks.

Well, I would not subscribe to a case of negligence against AWD until one knows the account the transaction was credited. Also, it’s not the responsibility of the auditors to write the for confirmation of individual debit or credit in a bank statement. The report did not help us either as it did not disclose the nature of the fund. However, AWD may need to review its audit procedures and programs.

12.   That AWD did not state in its Management letters for 2001 to 2005 accounts that it did not receive satisfactory responses on identified internal control lapses.

We may need to know the reason AWD left out this vital information in its management letters. The purpose of the management letter is to bring to the attention of the management identified internal control lapses that could mar the operation of the company for corrective action. Though the management letter is not usually exhaustive of all inherent internal control weaknesses, failure of any auditor to report SIGNIFICANT control lapses might give an erroneous impression that system is working effectively and efficiently. Therefore, I hold the view that AWD has a question to answer here.

13.   That AWD was involved in unrealistic profit forecast for the 5 billion irredeemable loan stocks as reporting accountants.

14.   That AWD relied solely on documentary evidence even when the internal control evaluation suggested that the documents could be wrong and unreliable.

Well. We may have to know from the APC how it came to the conclusion that AWD ought to disregard documentary evidence in the light of no additional available audit evidence.

15.   That AWD did not probe further when a supplier disclaimed in writing the N700 million certificate presented to them by the management.

It is expected that denial of a stock certificate by a supplier should put the auditors on enquiry on the reliability of accounting information and the authenticity of other documentary evidence presented by clients, AWD did not probe further as expected. The implication of this is that fictitious assets are being shown in the financial statements, while profits had been over cast to the tune of this fictitious assets value.

What could AWD have done in the light of this “stock certificate”? Nothing but to state so in its management letter. The audit committee and the Board of Directors after receiving the draft report may then request that the auditor adjust the stock to eliminate those fictitious assets value.AWD could also have disqualified the report.

16.    That AWD and in particular the engagement partners did not act with high level of professionalism and diligence.

17.   That the Company’s registrars did not dispatch dividend warrants to shareholders, and failed to report to SEC any actual or suspected breach or infringement or non-compliance with any of SEC rules and regulations.


In the light of the above various degree of sanctions were imposed on the individuals, companies and external auditors suspected to be involved in the saga. The sanctions range from monetary to suspension for 3 years and soon. The sanctions are produced hereunder and my opinion on each sanction are interspersed in italics and boldened:

1.    Cadbury Nigeria Plc to:

a. Pay a fine of one hundred thousand Naira (N100, 000.00) in the first instance and a penalty of five thousand Naira (N5, 000.00) per day from June 30, 2002 to December 14, 2006 within 21 days from the date of the decision (March 28, 2008) for filing with the Commission, financial statements that contained untrue/misleading statements; failing which trading on its shares will be suspended.

Total fine is 8,240,000 naira.

b. Pay a fine of one hundred thousand Naira (N100, 000.00) in the first instance and a penalty of five thousand Naira (N5, 000.00) per day from August 24, 2005 to the date of the decision (March 28, 2008) within 21 days, for filing a Rights Circular for the N5 billion irredeemable convertible loan stock which contained false/misleading statements, failing which trading on its shares will be suspended.

Total Fine is 4,835,000 naira

c. Pay a penalty of five thousand Naira (N5, 000.00) per day from June 30, 2002 to December 14, 2006 within 21 days from the date of the decision for failing to provide funds en-bloc for the payment of dividends to its shareholders despite the Commission’s earlier directive.

Total Fine is 8,140,000 naira. The aggregate of fines a+b+c is 21,215,000 naira

2. Messrs Bunmi Oni and Ayo Akadiri are: Banned from operating in the Nigerian capital market, being employed in the financial services sector and holding directorship positions in any public company in Nigeria.

3. The Messrs J.S.T. Bogunjoko, Abiodun Jaji, Andrew Baker and Christopher Okeke are: Suspended from operating in the Nigerian capital market, being employed in the financial services sector and holding directorship positions in any public company in Nigeria for a period of 5 years from the date of the decision.

4. Olusegun Aina, Akinbode Gbolahan and Tunde Egbeyemi were: Suspended from operating in the Nigerian capital market, being employed in the financial services sector and holding directorship positions in any public company in Nigeria for a period of 3 years from the date of the decision.

5. Rt. Hon. Uduimo Itsueli, Messrs Olatunde Falase, Raymond Ihyembe, Gabriel Onabote, Olusegun Oyewole, Matthew Shattock, Thomas Ayorinde, Z.C. Enuwa and S.J. Balogun are suspended from operating in the Nigerian capital market, being employed in the financial services sector and holding directorship positions in any public company in Nigeria for a period of one year from the date of the decision.

6. Messrs Cadbury Nigeria Plc, Rt. Hon. Uduimo Itsueli, Bunmi Oni, Ayo Akadiri, J.S.T Bogunjoko, Abiodun Jaji, Andrew Baker, Christopher Okeke, Olatunde Falase, Raymond Ihyembe, Gabriel Onabote, Olusegun Oyewole, Matthew Shattock, Olusegun Aina, Akinbode Gbolahan and Tunde Egbeyemi have been referred to the Economic and Financial Crimes Commission (EFCC) for further investigation and prosecution.

7. Akintola Williams, Deloitte is:
a. Ordered to pay a fine of twenty (20) million Naira within 21 days of the decision for its failure to handle the accounts of the company with high level of professional diligence failing which its registration with the Commission shall be cancelled.

b. Strongly reprimanded and warned to desist from engaging in acts that may affect the investing public’s confidence in the capital market.

c. Strongly advised to be more diligent in carrying out its assignments in capital market related issues.

d. Further directed to sign an undertaking to be diligent and of good behaviour in its future dealings in the capital market.

8. Union Registrars Limited is:

a. Ordered to pay a penalty of five thousand Naira (N5, 000.00) per day from June 1, 2002 to June 31, 2006 within 21 days of the decision, failing which its registration with the Commission will be cancelled.

b. Strongly reprimanded and warned to desist from engaging in acts that may affect the investing public’s confidence in the capital market.

c. Strongly advised to be more diligent in carrying out its assignments in capital market related issues.

d. Directed to sign an undertaking to be diligent and of good behaviour in its future dealings in the capital market.

In the light of the above sanctions, how were the shareholders compensated? Will these monetary fines and momentary “ban” enough to deter the culprit and other managers? I think NO. The “living” masterminds of the Enron case are still behind bars. Yet the Americans have the now popular Sarbanes Oxley Act. What Nigerians especially shareholders and investors need is an enabling Act to check the excesses of all players in the stock market.

I thank you for your time and patience.