THE Nigeria Stock Exchange is in the news again for the wrong reasons. What began like a personal disagreement between the Director General Professor Ndi Okereke-OnyiukeÂ and its President of Council Alhaji Aliko Dangote has resulted in the forced exit of the Exchangeâ€™s leadership by the Securities and Exchange Commission, SEC.
Debates about the propriety of SECâ€™s action have failed to consider the numerous encumbrances that the differences have caused in the operations of the Exchange.
At a time the Exchange is trying to elicit public confidence, after the erosion of the value of stocks, following the global economic melt down, the present crisis came in dimensions that questioned the importance public office holders attach to their responsibilities.
SEC was in a bind too about what to do to resolve the unprecedented disputes within the Exchangeâ€™s hierarchy. No decision would have favoured all the parties. Indecision would have been worse.
â€œThe Commission has closely followed the developments in the Exchange, particularly with respect to inadequate oversight of the NSE, ongoing litigation, and allegations of financial mismanagement, governance challenges, and the inordinate delays in the implementation of the succession plan for the Exchange,â€ Ms Arumah Oteh said in a statement.
â€œIn this deliberation, the Commission weighed the consequences on the market of a direct intervention set against the broader goal of safeguarding the interest of the public and protecting the investor. The Commission has decided that it is in the interest of the public and necessary to protect the investor to issue the following directives.
That the Council Member elected as President of the Exchange in defiance of the Court order cease acting as the President pending the outcome of the ongoing litigation; Council Members elected in defiance of the Court order cease acting as members of the Council pending the outcome of the ongoing litigation; current Director-General of the Exchange, Professor Onyuike, be removed from the office of Director General/Chief Executive Officer of the NSE; Affairs of the Exchange to be managed by an Interim Administrator appointed by the Commission pending the selection of a new Director General.â€
The appointment of an interim administrator has raised emotions from those who thought that direct government intervention, in this manner, was unhealthy for the Exchange. What would have been the alternatives?
Several litigations, numerous allegations of financial mismanagement, coupled with the fact that the Exchange would need a new Director General in the next few months, were constraints to other variations of this decision.
It would have been impossible to make an easy decision. The more SEC waited, the more it would have left the Exchange with a crisis-driven leadership, a team composed of people unwilling to work together.
What might be truly amazing is that all the allegations of financial mismanagement may not be new. Yet they are being treated in the same way as in the past.
Nobody wants to call the police. Nobody wants a proper audit of the Exchangeâ€™s accounts. Nobody thinks of the image of an Exchange that is presented as fraudulent.
SEC still has work to do. It should get to the root of the crisis at the Exchange in order to punish any guilty parties. The current decision should be interim, lest the sacks of the Exchangeâ€™s leadership be seen as a cover up for the misdeeds of many.