By WILLIAM JIMOH
The Nigerian Stock Exchange, NSE, recently launched a Whistle Blowing Portal called X-Whistle. The X- Whistle is meant to expose information that is inimical to the growth of the stock market.
According to the Exchange, the NSE X-Whistle is a programme that empowers a whistle blower (an employee, an investor, a compliance officer, an issuer, a stockbroker or any member of the public) to report possible violations of the rules and regulations of the Exchange, the securities law and fraud related activity within the market.
It is an important aspect of the NSE’s investor protection strategy designed to encourage those with information about misconduct to report it and to provide all stakeholders with the means of expressing their concerns in a responsible and effective manner without being hurt.
We showcased some shareholders’ opinion on the portal the penultimate week. Last week, more shareholders reacted and here is what they said: Excerpt:
OBEH Augustine, a minority shareholder:
The regulator needs to be very careful when it comes to the issue of whistle blowing, most especially in this part of the world. People blow whistle and by the time investigation is carried out, it will be discovered that the issues over which they raised alarm are not true. And when the regulator discovers that what is being said is not true, it is possible that other people that have serious issues to put forward may be denied the opportunity.
If anybody is blowing the whistle as regards the market, it is important for the regulator to ensure that they know the source and understand where the information is coming from because just like SMS, you have to be very selective, this can be done with proper investigation of information received before it is published.
It is also important that the regulator also identifies more with the shareholders; they should not sit in their offices and expect inflow of information, rather, they should be at companies’ annual general meetings and other places where things are taking place and investigate what market rule is being uphold and which is not.
The Securities and Exchange Commission, SEC, needs to ensure that its policies as well as that of the central bank are in accordance with the capital market rules. Take for instance, the way they nationalised some banks some years ago, we are not saying that the review of the banking industry as we had it was not good. In fact, most banks would have gone under if not for the rescue effort of the CBN, but it is only that some of those policies were too stringent. Imagine Intercontinental Bank with almost 400 branches was bought by Access Bank with less than 100. Look at Oceanic Bank also, you find out that it is all about policies but are we acting by the law?
Since Intercontinental Bank fell with lots of our investments, has anybody been brought to book and sent to jail, which will make us to say that yes, even if we do not get our money back, somebody is suffering for what has been stolen from us.
Alade Williams, minority investor:
The launch of the platform is very good, but it remains a stepping stone to get us to where we need to be which is a situation whereby everybody, including the government will be more interested in how the capital market operates.
In America for example, I refer to this country because it is a place where we should be comparing our market with. The Attorney General of New York State is always fighting one erring company or the other.
Right now, they are having issues with the Willie Brothers of Texas, these are billionaires; but the Attorney is saying they have insiders trading charges against them. We don’t have things like this in Nigeria; we only rely on the Nigerian Stock Exchange to carry out this function among others.
The Attorney General of Lagos State for example, should be able to bring cases to court about the flaws in the stock exchange, but we have not started to experience such.
We were all here when Bunmi Oni and Co ruined Cadbury by cooking the books. People like these should be made examples of bad corporate governance; they should have been made to go to jail not just giving them a slap in the judgment.
Apart from that, the success of this policy will be determined by the level of confidence, enlightenment and interest shareholders have in the market. Shareholders, who understand how the market works will embrace and use the platform for the good of all if they will not put their interest above that of the market and the economy.