By Peter Egwuatu
Criticisms have continued to trail the retention of the Nigerian Stock Exchange (NSE) immediate past Interim Administrator, Mr. Emmanuel Ikazoboh on the Council of the Exchange.
Ikazoboh’s appointment on the NSE was supposed to terminate immediately after the substantive Chief Executive Officer (CEO) of the NSE, Mr. Onyeama Oscar resumed duty on April 4, 2011 as promised by the Securities and Exchange Commission (SEC) when it intervened during the crisis that led to the removal of the erstwhile Director-General of the NSE, Professor Ndi Okereke-Onyiuke.
After over one month that Oscar resumed as the substantive Chief Executive Officer of the Exchange, stakeholders and capital market operators have continuously been criticizing and faulting the retention of former interim administrator on the Council of the NSE, blaming the apex regulator of the Nigerian capital market (SEC) for undermining the tenets of good corporate governance, a development they say will definitely affect investors’ confidence and market integrity.
Mr. Boniface Okezie, Chairman, Progressive Shareholders Association of Nigeria (PSAN) in his reaction over the retention of Ikazoboh on the council of the NSE said, “morally and ethically, it is wrong for SEC to retain Ikazoboh on the NSE council. In the first instance, SEC has no business interfering in the internal affairs of the NSE. So the appointment of Ikazoboh as Interim Administrator is already faulty. Now that Ikazoboh has completed the task of those who appointed him as Interim Administrator and with the coming on board of a substantive CEO for the Exchange, he should leave. It is not the duty of the SEC again to appoint Ikazoboh as Vice-President of the NSE after he has completed the alleged mission of stabilizing and recruiting a substantive CEO. He should quit honourably, that is how it is done in advanced economies. It is high time the SEC allowed owners of the Exchange, that is, dealing members and other stakeholders, to determine who should be in the council. It is an illegality for SEC to choose who should occupy the Council of the Exchnage.
Okezie, however, called on the Minister of Finance, Olusegan Aganga to intervene in the issue of the appointment of officers on the Exchange and call the SEC to order. The role of SEC is to regulate and develop the capital market and not necessarily to interfere in the daily activities of the NSE.
He further revealed the secret behind the SEC’s motive of retaining Ikazohoh on the council , saying “ SEC wants to use its agents to hijack the NSE. How can the SEC force the NSE to demutualise.? The owners of the NSE should be allowed to determine when to demutualise. The time is not ripe for the Exchange to go for demutualisation. There are many grey areas that need to be addressed. So SEC should allow the owners to reconstitute its council in order to solve those problems that have bedevilled the market.
Another stakeholder, Mr. Adebayo Adeleke, General Secretary, Independent Shareholders Association of Nigeria (ISAN) harps on the retention of Ikazoboh on the Council of the NSE.
According to him, “his appointment is illegal and should be questioned. How can a body that has been preaching corporate governance be the one defying it? We all know that Ikazoboh’s appointment did not follow due process so putting him on the council is to protect the interest of the Commission.
I think SEC wants to use him to accomplish the task of demutualising the Exchange so that they can have their own people on the Exchange.
Their intention is to hijack the Exchange so that their people will have majority stake. This is not done in developed countries, no single individual is allowed to own more than one per cent. It is sad that the people who are supposed to enforce corporate governance are the people truncating and undermining its implementation.
In his own reaction on the development, Mr Oderinde Taiwo, National Secretary, Investors Forum, said, “the process of bringing Ikazoboh into the Exchange as Interim Administrator is somehow transparent considering the crisis that rocked the Exchange, but I had expected him to quit the Exchange when the substantive CEO emerged. It is only in Nigeria that we can see this kind of thing happening. When somebody is appointed as Interim Administrator, he is not expected to continue in that organisation when he has accomplished that target of being there. For me, I expect Ikazoboh to leave even if he was re-appointed to remain permanent on the Council. He should have rejected the offer. Accepting the offer will rubbish his integrity and the effort he has put to bring the Exchange to point of recovery.
It will be recalled that the SEC during its intervention in the crisis that rocked the NSE Council ,on August 5th 2010, appointed Ikazoboh as Interim Administrator with mandate to source and appoint a substantive CEO after it sacked Onyiuke for the sake of protecting the interest of investors and market integrity.
It would be noted that following the assumption of duty by the NSE substantive CEO on April 4, SEC directed that one-month transition period, commencing from same day be allowed to enable proper handover by Ikazoboh to the new chief executive officer.
On the completion of the one month, SEC further directed that all the nominated members, including Messrs Ballama Manu and Emmanuel Ikazoboh, be on the Council pending the election of a new Council and also charged them to work with existing Council, saying the task of the Interim Administration was not yet completed, adding that “a lot more work will need to be done to put the Stock Exchange on a sound footing so as to achieve the objectives for which the Securities and Exchange Commission intervened”.
But speaking in Lagos recently when the new NSE boss assumed office, Ikazoboh said he was not smuggled into the council as alleged and that his appointment by SEC followed National Emergency Management Agency’s process.
He also said all the erstwhile Directors-General/ CEOs of the Exchange are automatic members of the Council for a period of time.
Ikazoboh said while he is on the Board, he would be able to guide and support the new CEO who is still new.
Ikazoboh said “having completed the one month transition period, we will be doing the country no good if we abandon the new management to work alone without proper guidance and this explains my staying in the Council.”
Ikazoboh said the interim administration had almost completed its mandate except the forensic audit report which is being hindered by series of pending court cases.
He said the management and the Council are working together to ensure that the court cases are amicably settled so that the market can move forward, adding that once that is done, a new council would be put in place. Meanwhile, the Association of Stockbroking Houses of Nigeria (ASHON) had recently joined other stakeholders in petitioning the SEC , faulting the decision to allow the Interim President of the NSE, Mallam Ballama Manu and Ikazoboh to remain on the Council of the Exchange.
However, ASHON, which is the umbrella body for managing directors of stockbroking firms, in a letter dated April 13, 2011 said the Commission was breaching stockbrokers’ right as shareholders/members of the exchange with that directive.
“Our position is that the Interim Administration has ended with the new CEO. The attempt to perpetuate the continued stay of the Interim Administrator as deputy of the NSE President is not only illegal, but high handed.