By Timeyin Ejoor
It is rather unfortunate and ironic that in this shore, those who are supposed to make things better are responsible for taking us one step forward and many more steps backward because of personal aggrandisement. Those who are in position of authority would rather become the clog in the wheel rather than the enabler.

The melodrama witnessed in one of the committee rooms at the National Assembly few days ago involving the Director-General of the Securities and Exchange Commission, Ms. Arunma Oteh, and members of the House Committee on Capital Market is not only a show of shame but a national embarrassment at the level of our propensity for corrupt practices.

It is sure to further heighten the apathy which has trailed the market in recent times. Even the manner the international media is reporting the matter is most uncharitable. Now, we hear that some foreign investors trading on the Nigerian Stock Exchange are threatening to dump their investments.

The Securities and Exchange Commission by the law establishing it, that is, the Investment and Securities Act No 45 of 1999, gives the body the mandate to provide surveillance over the Nigerian Stock Exchange; to ensure orderly, transparent and equitable dealings in securities and protecting the market from insider trading abuses. As a regulator, it has a clear duty to also protect the investing public from the sharp practices of operators in the capital market.

Despite its clear mandate, many investors who were attracted to the market as a result of the boom in the market between 2004 and 2008 have had their fingers burnt; losing fortunes as a result of not just the global meltdown, but, more especially, the sharp practices of the so-called market makers and share price manipulation.

The banks which were responsible for the boom as a result of their quest for funds from the market to meet their new capitalisation requirement in 2004 were also not innocent in its doom.

While everyone enjoyed the boom with market capitalisation reaching a record high of $100 billion in March 2008, 60 per cent of which equity was owned by banks, experts had warned that the growth of the NSE was weak and unrealistic.

However, there was no word of caution or accountability from SEC, then headed by Musa Al-Faki. Instead, the NSE organised a so-called road show in London for the quoted banks and a few others to show their increasing capacity to the international fund managers to get them to include Nigerian banks in their portfolio.

Of course, nothing positive came out of the event. It was nothing but a jamboree. I was at that conference at the London Stock Exchange for the event and I remember clearly discussing with a French investment expert who told me point blank that our NSE was living on borrowed time; saying the boom would not last.

Even though I saw it as the normal European stereotype skepticism, I remained conscious of his warning and I was better for it. But not many were lucky and a large percentage of the investing public today perceive the market as a plague to be avoided.

So, it is understandable when efforts are initiated to dig deep into the root cause of the bust with the House of Representatives setting up an investigating panel to unearth the reasons for the collapse and attempts to reverse the trend. The House Committee on Capital Market was given this mandate. However, what we have witnessed so far, at least up till early last week, gives more cause for concern.

The allegations bordering on integrity of the House Committee have thrown up more questions than answers in the quest to deepen the market.

While the probe is welcome, considering the colossal loss suffered by many people as a result of the downturn in the market, it is unfortunate that those tasked with the responsibility of carrying out the assignment could not rise up to the occasion.

Even though the committee, through its chairman, Honourable Herman Hembe, has voluntarily stepped down from the probe, it is necessary to dig deep and unearth the misconduct which have been leveled by all parties concerned. While the committee may be accused of alleged corruption, it is obvious that SEC also has several issues of concern, particularly on corporate governance.

Honourable Iyembe, a lawyer representing Konsh Shnvandeikiya Federal constituency in the House, should know better as a legal practitioner than to allow his emotions and idiosyncrasy to take over his judgement and conduct at the probe; he became the accuser and the judge at the same time.

He was not only brazen but almost authoritarian all through the few days the committee’s proceedings were broadcast on national television. I joined the transmission live on the second day of proceedings and I became curious at his line of questioning and the verve with which he wanted answers to his inquiry.

It was obvious he was not fishing but had determined answers already, only needing corroboration. I can adduce two main reasons why Hembe should not have been a member of the probe committee. One, as chairman of the House committee on Capital Market, that position puts him as an interested party since he would have been interacting one way or the other with the players in the market in the conduct of the committee’s oversight function.

This is why it is necessary for the House to avoid assigning such probe to the standing committee since they may either have been compromised through personal interactions or have an axe to grind in the course of their over-sight functions.

Hence it is advocated that ad hoc committees should be set up when such inquiries are deem necessary.  Secondly, as one of the youngest members of the House, he should have passed through some tutelage from older members before assuming such responsibility.

The Committee in fairness raised some genuine posers which need some clarification by the hierarchy at SEC. Although one can understand the IFC/ESMID providing a Resident Bond Adviser to the commission to help develop the Fixed Income Market, however, hiring or secondment of two staff of a bank quoted on the Exchange is unacceptable and inconsistent with corporate governance ethos.

Wouldn’t those individuals serve the main master’s interest principally under such circumstances? If the Commission can approve 30 million naira to assist the work of the committee, it sure stands in good stead and has the capacity to employ and adequately remunerate persons of similar skills and capacity.

The allegations made by the SEC’s Director General are indeed very grave and she has to provide proof that it was not just another ruse to ruffle feathers and divert attention from her own activities as the head of the apex regulatory body. She must also name the third party said to have been sent by the committee to collect the five million naira bribe few days to the commencement of the probe.