The Association of Stockbroking Houses of Nigeria, ASHON, has applauded the federal government and Ministry of Finance on the N22.6 billion forbearance package granted 84 stockbrokers indebted to Assets Management Corporation of Nigeria, AMCON.
In a statement to Vanguard, the association’s Chairman, Mr. Emeka Mmadubuike, said, “The Association wishes to publicly register her appreciation, on behalf of the entire Stockbroking community and indeed the capital market, to the President of the Federal Republic of Nigeria, His Excellency Dr Goodluck Ebele Jonathan, and the Honorable Minister of Finance and coordinating Minister of the Economy Dr (Mrs) Ngozi Okonjo Iweala acceding to our request and granting the forbearance.
“We wish to also appreciate the Governor of the Central Bank , Sanusi Lamido, The Managing Director of AMCON, Mustafa Chike Obi, The Director General of SEC , Ms Arunma Oteh , the Chief Executive Officer of the Nigerian Stock Exchange, Oscar Onyema and also the members of the Ministerial Committee on resuscitation of the Capital Market chaired by the Deputy Governor of Central Bank of Nigeria, Kingsley Moghalu, as well as our colleagues from Chartered Institute of Stockbrokers and Association of Issuing Houses of Nigeria for their respective roles in getting this request through.”
He said he was confident that with the move, the capital market would begin to play its pivotal role as the engine room for the transformation of our nation’s economy, while appealing to the government to continue to look for other ways to resuscitate the capital market to enable it compliment the various reform programmes of government and to become an integral component for the growth and development of the economy.
According to him, the association over the last three years has solicited for the forbearance on the margin accounts of some of its members with banks, which was taken over by AMCON.
“Our request was based on the premise that for margin accounts where parties made contributions, no party looses more than the contribution it had made. The ‘debt’ on the margin accounts came about from the fact that banks failed to exercise the margin calls as required by the arrangement in the face of falling share prices.
The ASHON boss assured that the association would continuously work in collaboration with other stakeholders in the market to initiate and pursue processes, procedures and policies in the areas of risk management, investors’ protection, corporate governance and professional conduct, to ensure there would be no reoccurrence of the situation that led to the huge margin loan exposure b y stockbrokers.
The Minister of Finance, Dr. Ngozi Okonjo-Iweala, had on Monday announced a N22.6 billion forbearance package for 84 stockbrokers, saying that the ministry decided to grant them bailout because the debt overhang was dampening activity in the capital market.
She, however, stated that the forbearance would be accompanied with sanctions to discourage excessive borrowing behaviour by capital market operators in the future. Besides, she said that stamp duties and VAT on stock market transaction fees have been eliminated as well.