BY BEN AGANDE

ABUJA—The House  of Representatives Committee on Capital Market and other Institutions, yesterday, accused the Securities and Exchange Commission of compromising its regulatory position by engaging a staff of one of the banks  it was supposed to be investigating as an adviser to the commission.

At the resumed public hearing of the committee in Abuja, chairman of the committee,  Herman Hembe, said the engagement of the staff of Access Bank, still on the pay roll of the bank, by the commission, would erode confidence of investors in the impartiality of the commission.

But, Director-General of the commission, Ms Orunmah Oteh, told the committee that the hiring of the staff was to meet the specific need of the commission, adding that the concerned staff was not involved in the operations of monitoring the performances of the bank in question.

The commission’s head of Human Resources also admitted before the committee that securing the services of a bank that the commission was supposed to regulate was anti-thetical to the performance of its constitutional responsibilities.

The resumed hearing had in attendance the Director-General of the Nigerian Stock Exchange, NSE, Mr Oscar Onyema, who apologised to the committee for his failure to appear before it on Tuesday, noting that his failure was not in contempt of the parliament.

Yesterday’s hearing was characterised by altercations between Hembe and Oteh, who at a point,accused him of pursuing an agenda other than stabilising the capital market.

But, in a swift reaction, Hembe said the role of the SEC’s boss as a regulator would negatively impact on credibility of the market if she was perceived by other investors as not being impartial.

He said: “How can you engage the staff of Access Bank when they are still working with the bank as staff of the commission when you are supposed to regulate the bank?

“It would appear that you set out to sabotage the workings of the commission by your actions. The House wrote you that you should with- hold the final approval to Union Bank, but you went ahead to do so, even against the advise of your team. With the way it is, there is no way the capital market can be better.”

The committee chairman also accused Oteh of ignoring extant laws on how much a chief executive could spend, pointing out that in one such instance, N825,000 was spent on feeding in a day, while another N30 million was expended on accommodation.

Oteh fights back
Defending her decision to secure the services of the Access Bank staff, Ms Oteh said “those workers are on secondment from Access Bank. Their work has nothing to do with our regulatory functions in SEC.

“By your comment, you are implying that Sec had been affected by the secondment. This is not the case.”

Earlier, Onyema had identified some of the problems affecting the capital market to include the global financial crisis, increase in oil prices and the low financial literacy of investors who do not consider the risks involved in some investment.

He also blamed the crisis on inadequate regulatory frame work which failed to adequately regulate the market as it should do.

In his contribution, President of Chartered Institute of Stockbrokers, Mr Michael Itegboje, called for the setting up of a stabilization funds to rescue the capital market from its downward slide.

He also called for the shareholders of the recently nationalized banks to be given a certain percentage of their shares from the nationalized banks as a way of cushioning the effect of government’s action on their investment.