The Securities and Exchange Commission (SEC) has announced the suspension of Ecobank from all capital market activities due to irregularities surrounding a loan.
The capital market regulator said that a client of Ecobank, Arian Capital Management had used capital from another company, Avil Services Ltd without the latter company’s permission as collateral for a loan from Ecobank. After Arian was suspended, SEC asked Ecobank for explanations, which is still being awaited.
“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,” a statement from the SEC read.
The SEC statement also said Arian had taken shares belonging to Avil Services Ltd and had used them as collateral for an Ecobank margin facility without Avil’s permissions, withholding the shares and accruals from Avil.
Officials of Ecobank were not available immediately for comment.
Pan-African banking group, Ecobank has operations in 32 African countries, serving 9.4million customers. Its biggest operation is in Nigeria, Africa’s second largest economy. It is headquartered in Togo.