Leadway Didn’t Violate Our Law By Investing In First Bank—PenCom

The National Pension Commission has said that Leadway Pensure Limited has not breach any of its investment regulation by investing pension funds in the equities of FBN Holding Plc.

The Commission in a statement said the clarification was necessary following several publications alleging breach of its regulation on investment of pension fund assets by Leadway Pensure in FBN Holdings equities.

PenCom categorically stated that the allegations are not correct and must have been made based on the lack of understanding of the Investment Regulation issued by the Commission.

It explained that the equity investments in FBN Holdings made by Leadway Pensure Limited on behalf of the pension funds under its management are in the name of the pension fund and belong to the RSA and cannot be appropriated or classified as shareholdings of any related party to the PFA.

The statement reads, “The Commission’s attention has been drawn to several publications in the media alleging breach of its Regulation on investment of pension fund assets by Leadway Pensure Ltd, a licensed Pension Fund Administrator (PFA), in the equities of FBN Holdings Plc.

“The Commission categorically states that the allegations are not correct and must have been
made based on the lack of understanding of the Investment Regulation issued by the Commission.

“The equity investments in FBN Holdings made by Leadway Pensure Ltd on behalf of the pension funds under its management are in the name of the pension fund and belong to the RSA holders.

“Therefore, the equity investments in FBN Holdings Plc cannot be appropriated or classified
as shareholdings of any related party to the PFA.

“Leadway Pensure Ltd is not in breach of the Investment Regulation by investing pension funds in the equities of FBN Holding Plc.

“Records which can be confirmed from the Securities and Exchange Commission show that the equity investments in FBN Holdings Plc are in the name of the Pension Fund on behalf of the RSA holders.”

PenCom further clarified that Pension Fund Assets are managed by licensed PFAs and held in custody by Pension Fund Custodians (PFCs) on behalf of Retirement Savings Account holders and other beneficiaries of the Contributory Pension scheme (CPS), in line with the provisions of the Pension Reform Act 2014 (PRA 2014).

Specifically, Section 69 (b) of PRA 2014 stipulates that the PFA and PFC shall take reasonable care that the management or custody of the pension funds is carried out in the best interest of the retirement savings account holders.

It said all investments made by licensed PFAs in eligible securities and corporate entities are “ring-fenced” and belong to the RSA holders and other pension beneficiaries.

“Accordingly, these pension assets cannot be appropriated directly or indirectly to any individual or related party of the PFA,” the commission added.

The Commission in the statement explained further that based on the provisions of Section 6.1(iii) of the Investment Regulation dealing with conflict of interest, “The PFA or any of its agents are prohibited from investing Pension Fund Assets in the shares or any other securities, issued through public or private placement arrangements, by related party/person of any shareholder of the PFA”.

The statement stated that related persons/party as defined in Section 1.10 of the Investment Regulation
“includes natural persons related by blood, adoption or marriage; legal entities one of which has control or significant influence over the other, or both of which are controlled by some other person or entity; a corporate entity where any of the aforementioned holds 5% or more beneficial interest; and any other relationship that can be reasonably construed as related persons or parties”.

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