SEC investigates Deap Capital over alleged mismanagement of clients’ fund

The Securities and Exchange Commission, SEC, has commenced investigations into the activities of Deap Capital Management and Trust Plc over alleged mismanagement of clients’ funds and its inability to return investment sum on maturity.

The investigations, it was gathered was pursuant to the power conferred on the commission by Section 13 of the Investment and Securities Act (ISA) 2007.

Also being investigated is DVCF Oil & Gas Plc, a sister company of the financial services company which specialises in funds management, capital market operations, financial advisory services, portfolio management, leasing and Issuing House services among other range of businesses.

SEC has consequently advised the general public to refrain from transacting any business in respect of funds with the Directors of the
companies pending conclusion of the investigations even as it urged members of the public with useful information on the activities of the companies and its directors to furnish same to the commission.

The Nigerian Stock Exchange, NSE, had last year expressed concern over Deap Capital and 12 other listed companies following their inability to submit their financial results as at when due, despite reminders sent to them concerning their post listing obligations to the bourse.

Deap Capital has been struggling with losses in the past few years, a development the management attributed to domestic and global financial challenges operators faced during the economic meltdown.

However, in its latest audited financial result for the year ended September 30, 2012, the company recorded N221.166 million profit after tax as against the N760.347 million loss that was reported in 2011.

Deap Capital current earnings per share also stood at 15 kobo against the negative earnings of 49 kobo that was recorded in 2011.

However, gross earnings of the company currently trading at N1.09 kobo dropped from N178.832 million in 2011 to N151.847 million in 2012.

Market sources disclosed that the company usually trade actively in companies quoted on the exchange, while some of the clients’ funds are in funding of oil and gas contracts that are managed through its associate company DVCF Oil & Gas Plc, and at the conclusion of the business cycle, profit made are shared between providers of funds and Deap Capital, the fund managers.

Deap capital was incorporated on June 5, 2002 and listed on the floor of the Nigerian Stock Exchange, NSE, on December 17, 2007.

Its subsidiaries are Resort Securities & Trust Limited, Resort Savings & Loans Limited, DVCF Oil & Gas Plc and Resort Development Limited.

The company’s target markets are the high net worth individuals and institutions capable of investing a minimum of one million naira and above for a minimum of 180 days.