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Anxiety appears to be brooding in Nigeria’s capital market following the tusslebetween the Securities and Exchange Commission (SEC) and Chaka Technologies Limited and its promoters over their offering for sale shares, stock or other securities.
The Commission, had in a statement, said that the Investments and Securities Tribunal (IST) made interim orders restraining Chaka Technologies Limited, and its promoters, from advertising or offering for sale shares, stock or other securities of companies or other entities.
SEC said the interim order applies to all Chaka platforms, citing that the startup carried out operations outside the regulatory purview of the Commission and without requisite registration while adding that the said the interim order is to ensure Chaka’s operations are regulated by law to protect investors’ interest.
“As disclosed in the processes filed by the Commission, the objective of the proceedings is to ensure that all investment activities and market players are duly regulated by the Commission, in line with the requirements of the law. The Commission is concerned that without proper regulation, the genuine aspirations of market innovators and investors could be subverted through the activities of unscrupulous actors, who would try to exploit the growing popularity of Fintech investment options, to the detriment of the investing public. Further proceedings before the Tribunal have been adjourned to January 15, 2021.”, the SEC stated.
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However, the Chief Executive Officer, Chaka Technologies Limited, Tosin Osibodu, said that investor funds were placed by a duly licensed entity and remained safe through Citi Investments, in a bid to reassure investors after the SEC granted an interim order to restrict its operations.
He said the company only learned about the SEC’s position on the same day the statement was published on their website.
“While we await receiving the formal order from SEC, please note that all investments are placed by a duly licensed entity and remain safe through Citi Investments (using the Chaka platform), and will continue to be custodied by an SEC-regulated broker. We do not advertise, solicit, or offer securities of companies as alleged”, he said.
According to him, the Fintech company has been transparent about its regulatory status, leveraging strategic partnerships with registered brokers in the U.S and in Nigeria, specifically Citi Investment Capital Ltd, which is regulated by the SEC.
