The Nigerian Stock Exchange (NSE) will tomorrow place the shares of Resort Savings and Loans Plc on full suspension as capital market regulators continue investigation into allegations of fraud and corporate abuses by the management and board of the mortgage company.
A suspension order by the Securities and Exchange Commission (SEC) and reissued by the Nigerian Stock Exchange (NSE) indicated that Resort Savings is being suspended over ongoing investigations into the activities of the company.
With the full suspension, there will be no trading on the shares of Resort Savings.
The document obtained by Ripples Nigeria showed that SEC was the one that directed the NSE to place the shares of Resort Savings on full suspension.
“In compliance with the provisions of Section 35 of the Investments and Securities Act, 2007 and in order to give effect to the above directive, the Exchange will suspend full trading in the securities with effect from Tuesday 06 December 2016. The suspension will remain in force until further directives from the SEC,” the order stated.
Ripples Nigeria gathered that the SEC was investigating allegations of insider abuses and fraud against some directors of Resort Savings. It was alleged that the managing director of Resort Savings, Mr Olayinka Abimbola was forced to resign on the weight of the allegations.
It should be recalled that the Consumer Protection Council (CPC) had earlier stated that it had started investigations into alleged diversion of mortgage funds and other sundry fraud allegations against Resort Savings.
CPC said it was starting formal investigation of RSL because of the failure of the company to respond to earlier complaints against it, vowing that the consumer rights agency would prosecute any erring official of the company.
Director General, Consumer Protection Council (CPC), Mrs. Dupe Atoki, said the Council was determined to investigate the operations of the company as well as engage in other legal steps in line with its enabling law with a view to protecting the consumers of the services of the primary mortgage company.
According to CPC, consumer complaints bordering on alleged diversion of mortgage loans and consumers’ deposits had been lodged against RSL, prompting the Council to beam its searchlight on the primary mortgage bank’s operations.
CPC indicated that it has already notified the Central Bank of Nigeria (CBN) and the Federal Mortgage Bank of Nigeria (FMBN) of the complaints against RSL. RSL is a primary mortgage institution licensed by the CBN to undertake mortgage business in Nigeria and also registered with the FMBN.
The Council stated that one of the complaints against the mortgage company was on behalf of a group of nine beneficiaries of FMBN Batch 54 loans, which alleged that RSL in 2014 received N149.3 million on behalf of 14 beneficiaries, including the nine and that the company failed to disburse the loans to the developers of the said beneficiaries.
CPC said the nine complainants further alleged that five of the 14 in the said batch 54, who are staff of Independent Corrupt Practices Commission (ICPC) brought in the Commission to intervene on their behalf on the issue and thereby forced the mortgage company to disburse N47.25 million due to the five, leaving N102.1million undisbursed to the developers of the remaining nine.
The consumer protection agency stated that the group of nine complainants alleged that the action of the primary mortgage company not to disburse their loans led to the revocation of their letters of allocation by their developers.
The Council also disclosed that other complaints border on default in paying back deposits to depositors and failure to refund equity contributions of disappointed mortgage applicants, making the total worth of the claims against the company on the alleged diversion mortgagors’ funds and default in refund of consumers’ deposits to amount to N128,323,603.64.
CPC stated that it had communicated the details of the complaints from the aggrieved depositors and mortgage contributors to the company for full response but the company failed to respond, noting that the failure of the company to respond appropriately now places the option of the prosecution of the company’s principal officers.
According to the Council, some of the allegations of the consumers against the company included its failure to pay back deposits made by consumers, even after the agreed tenor was over and repeated demands made by them, as well as its alleged diversion of loans disbursed to mortgage beneficiaries by FMBN.
CPC also disclosed that consumers accused RSL of providing them with incorrect information about their applications for National Housing Fund loans, such as giving non-existent batch numbers, with a view to deceiving them into believing that their applications were under consideration.
But in a statement signed by the head of legal division, Resort Savings and Loans Plc, Chidi Ahaotu, the mortgage company stated that all “these allegations were based on misinformation and lack of coordination on the part of the customers” noting that the customers regrettably “had unresolved issues with the bank with respect to their failure to produce the title deeds of the properties in question”.
According to the company, when the complaint of the Consumer Protection Council came, it swiftly replied with the correct position of things via a letter dated August 5th 2016 which was duly received and stamped in the office of its Director General. A copy of the letter was seen by Ripples Nigeria.
The mortgage bank said that following the intervention of the Federal Mortgage Bank of Nigeria (FMBN) the disbursement of funds to batch 54 have been recalled and Resort is in the process of transferring the funds to FMBN.
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