A federal high court in Abuja has ordered the freezing of the accounts of six online investment firms following a request by the Central Bank of Nigeria.
The accounts will remain blocked for 180 days, The Cable reported Tuesday.
The firms are Bamboo Systems Technology Limited, Rise Vest Technologies Limited, Bamboo Systems Technology Limited OPNS, Chaka Technologies Limited, CTL/Business Expenses, and Trove Technologies Limited.
The platforms offer Nigerians access to stocks, bonds and other securities in both local and international markets, and have in recent years grown in popularity in the Nigerian fintech space, especially amongst young people.
In April, the Securities and Exchange Commission said investment services offered by the firms were illegal.
The CBN now accuses the companies of engaging in “illicit forex transactions” and says it will need time to complete its investigation, a court order cited by The Cable said.
The paper quotes a motion ex parte by the CBN through its counsel Michael Kaase Aondoakaa, as saying that “the investigation being carried out concerns what has been discovered to be serious infractions by the defendants/respondents in connection with some foreign exchange transactions, and non-documentation by the defendants/respondents in violation of the extant laws and regulations, particularly the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act and the Central Bank of Nigeria foreign exchange manual.”
“That more specifically, there is a grave allegation that the defendants/respondents are engaged in illegal foreign exchange transactions, accessing/procuring of foreign exchange via their banks from the Nigerian foreign exchange market via several bureaux de change, international money transfer operators and have transferred cash deposit of more than S10,000.00 (Ten thousand dollars) to various accounts overseas contrary to provisions of extant laws and regulations and also traded in foreign securities and cryptocurrencies in contravention to CBN Circular referenced TED/FEM/FPC/GEN/01/012 and BSD/DIR/PUB/LAB/014/001 dated February 5, 2021, and July 01, 2015.
“It is evident that Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited and Trove Technologies Limited are complicit in operating without license as asset management companies and utilising FX sourced from the Nigerian FX market for purchasing foreign bonds/shares in contravention of CBN’s directive.”
The judge approved the freeze on the accounts and said those aggrieved can approach the court to seek redress. He adjourned the matter to February 20, 2022, for hearing.
Bamboo, Risevest react
Bamboo and Risevest responded to the decision Tuesday, assuring their customers that their investments were safe.
Bamboo told its clients:
“We’re aware of the recent reports about us. Our legal and government relations teams are looking into it but we thought it was important to let you know that your money remains safe with Bamboo and will always be readily accessible.”
Also, Risevest said: “About the latest news about us and our FX dealings, you can be sure that your investments and funds are safely managed, that funding and withdrawals will continue to be processed as normal, and that our U.S operations remain intact.
“We will work with regulators, as we always have to ensure that all issues raised are properly addressed. However, this does not affect our users or their investments, which are managed by regulated third-parties in all jurisdictions in which we operate.”