By Peter Egwuatu, Michael Eboh, Chinedu Ibeabuchi, Ben. Agande & Emman Ovuakporie
Oteh Vs Okereke-OnYiuke: Documents against me doctored – Okereke-Onyiuke

LAGOS — Former Director-General of the Nigerian Stock Exchange, NSE, Professor Ndi Okereke-Onyiuke, yesterday, indicted the Securities and Exchange Commission, SEC, for collecting unapproved fees from transactions in the secondary segment of the Nigerian capital market.

Capital Market Probe: Former Director General of Nigeria Stock Exchange Ndidi Okereke taking oath at the ongoing Ad hoc House Committee probe of Capital Market in Nigeria at National Assembly Abuja. Photo by Gbemiga Olamikan.

She also disclosed that former President Olusegun Obasanjo compelled her to lead the Transcorp team against her wish as Director-General of the Stock Exchange. She said: “I was directed by former President Olusegun Obasanjo who came up with the idea of establishing Transcorp to be like the Asian Tiger to oversee and lead the management of the company.  Transcorp was made to be a public company because President Obasanjo directed that all Nigerians should be part of it, even government officials were allowed to buy shares of Transcorp.

“When he told me to be the chairman of the company, I objected but he insisted that I should see it as a national assignment. I also went to the council of the NSE to seek their approval and they gave me the go ahead. So it was not an illegal act because the council of the NSE approved it. There was no conflict of interest with my appointment as chairman of Transcorp and DG of the NSE.”

Also yesterday, the House Ad-hoc Committee, probing the near collapse of the Nigerian capital market ordered that Ms. Arunmah Oteh, appear before it, latest, today May 9, by 10 am or it would be forced to invoke its legislative powers on her.

But in her testimony yesterday, the former Director-General of NSE said rather than blame the state of the stock market on the expenses she incurred, “the intervention in the Stock Exchange by the Securities and Exchange Commission has kept the market comatose. As long as the council of the stock exchange approves money to be spent, nobody can challenge that” she said.

On the money that she was said to have spent on trips, Professor Okereke-Onyiuke said the Securities and Exchange Commission “doctored some of the documents that they broke into NSE and removed” saying that “the kind of money they are mentioning even stock brokers know that NSE does not have that kind of money”. She however noted that because some of the issues are subjudice, she was not willing to speak on them.

But giving an insight into the long service award which led to the purported purchase of the Rolex Watches, the former DG of NSE said the award was for 48 years of service which took into consideration even people who had died after serving in the exchange for a long time.

“What is wrong with a private company buying gifts for its staff who have served well. Even private companies celebrate long service award for their staff. It is nobody’s business if the council approves the expenses. We do not have to take permission from anybody”, she said.

On the money she purportedly spent on trips, the former DG said the amount mentioned by the DG of Securities and Exchange Commission “was doctored” but added that members of the NSE were sent on training all over the world including members of the board of the exchange who may be appointed.

SEC collects 0.3% of NSE charges

She accused the Securities and Exchange Commission of collecting 0.3% from the NSE’s operational charges which she said the commission does not account for. She called for proper funding of SEC  to enable the commission carry out its regulatory functions properly.

On the reasons for the near collapse of the Capital Market, Prof. Okereke‑Onyiuke said the indiscriminate granting of margin loans by banks, the failure of the SEC and the CBN to carry out their regulatory duties and the placement of companies that were not listed on the stock exchange.

Speaking on how to resuscitate the market, the former NSE boss called on the government to intervene by bailing out the capital market as it was done in the money market. She also called for the listing of multinational oil and telecommunication companies either through legislation or through persuasion in order to make the capital market stronger while also encouraging more indigenous companies to be listed in the stock exchange.

She also called for proper funding of the Securities and Exchange Commission so as it will carry out its regulatory functions, noting that a situation whereby it is partly dependent on those it regulates has a tendency of compromising its regulatory functions.

SEC’s illegal collection from NSE

Onyiuke, in her presentation at the public hearing of the House of Representatives Ad-Hoc committee probing the near collapse of the Nigerian capital market, said “SEC has been illegally collecting 0.3 per cent as fee from every transaction in the capital market”; a development she said is not backed by any legal provision. She disclosed that the monies collected by SEC were not accounted for and not remitted to the federation account by the commission.

According to her, “the 0.3 per cent transaction fee collected by SEC is due to an arrangement between the NSE management and SEC, as parts of its support for the commission”.

She further said: “There is no where in the Investment and Securities Act, ISA, or in the law setting up SEC where it was authorized to collect fees from transactions in the Nigerian Stock Exchange, NSE. The 0.3 per cent fee only came about due to an arrangement, at a time when SEC came to the NSE to help fund its operations. The NSE was also later advised by certain persons in government to support the authority responsible for policing the capital market.

“It is important to note that SEC does not account for the monies collected from the NSE and the money is not remitted to the federation account.

“I would advise that the Federal Government fund SEC, 100 per cent. At the moment, SEC is partly dependent on the market through transaction fees and penalties. This has the tendency of compromising regulatory integrity.” On accusation of monopoly of the NSE, and stopping the proposed establishment of Abuja Stock Exchange, Onyiuke said, “I am not against the establishment of Abuja Stock Exchange. If for any thing, I welcome competition.  What I was against was using tax payers’ money to float Abuja Stock Exchange; this is because government has never managed any business successfully. I rather encouraged a situation where private people will come together and pool resources together to form an Exchange. Why has SEC not revived the comatose Abuja Securities and Commodities Exchange?  Why did they decide to interfere with the activity of the NSE that is privately driven?

“If you want me to start and revive Abuja Securities and Exchange Commission I will do it now that I am retired. I will get it up and running in the next six months for free.”

On her involvement in raising fund to support Obama

She said: “People misunderstood what I did. I never gathered money to support Obama’s election. The N100 million dinner for Obama was simply to create awareness for his presidential bid.

When Obama was only eight months old as a senator, he queued to take photograph with me when I was honoured by the New York Stock Exchange. Obama is someone I knew before he became US President. I did not raise money for his campaign as being speculated. Even the Economic and Financial Crimes Commission (EFCC) had investigated the fateful dinner and found me not culpable.”

Why I was removed as DG of the NSE

She said: “My removal by SEC was part of an orchestrated plan to hijack the demutualization of the NSE. I was forced out because SEC knew if I completed my tenure in the NSE, I will be on the council of the NSE for the next three years, thereby, giving me the opportunity to also supervise the demutualisation process.

On SEC’s alleged plans to build a world class market

She further flayed SEC and the NSE’s campaign of making the Nigerian capital market a world class market, saying the market has already attained a world class stature since 2007.

She said the NSE was classified a world class market by the World Federation of Exchanges, WFE, in 2007, after their meeting in Nigeria, while Nigeria’s former president, Umar Musa Yar’Adua, was on hand to usher the NSE to a world class nature through the commissioning of the world class electronic trading floor of the NSE.

According to her, the NSE is a member of the WFE and we participate in every activities of the WFE, except voting.

“The NSE is an affiliate of the WFE and not a voting member. We are not yet a voting member because the amount needed to qualify to vote is a hundred times more than the amount to be paid for being an affiliate member.”

NSE, SEC stealing ideas from my document

She disclosed that the current NSE management and SEC have done nothing new in driving the market forward, noting that both SEC and NSE are acting on recommendations in the document put forward by her management team between 2008 and 2010.

According to her, the NSE had commissioned a committee to drive the rebound of the market in 2008, with the committee concluding their work by 2010 and presenting a document which the NSE was prepared to implement. She said the document was stolen by SEC during the illegal invasion of the NSE in August 2010, which led to her illegal removal from office.

“The current NSE management and SEC have not done anything different or new, they are only acting on recommendations in the document submitted by the committee I commissioned to proffer solution to the recovery of the capital market. The Chief Executive Officer of the NSE, Oscar Onyema, should be made to bring the documents,” she said.

We never shared money at the NSE

She denied culpability in claims that she and members of Council of the NSE, shared money belonging to the NSE, saying that the NSE only allocated funds to Council members to enable them travel and visit other stock exchanges to learn and expand their knowledge base on effectively supervising and governing the exchange.

Ikhazoboh was indicted in Cadbury’s saga

She further stated that the Interim Administrator, Mr. Emmanuel Ikhazoboh, who was appointed after her removal, was personally responsible for auditing the accounts of the NSE for six years.

She also disclosed that Ikhazoboh was indicted along with his accounting firm, Akintola Williams Deloitte and Touche, by SEC for their role in Cadbury’s financial misappropriation saga.

She declared: “Ikhazoboh was responsible for auditing the accounts of the NSE when he was working for Akintola Williams Deloitte and Touche. He later rose to become a partner in the same firm. He was responsible for auditing the NSE’s account for six years. ADuring this time, he did not find anything wrong with the account, why would SEC in 2010, claim something was wrong with our accounts and appoint someone responsible for auditing the account to take over?

“It would be recalled that Ikhazoboh was personally indicted by SEC along with Akintola Williams for their role in the Cadbury financial misappropriation issue.”

Meanwhile, it should be noted that Chairman of the committee, Mr. Ibrahim El-Sudi, condemned Oteh’s refusal to appear before it, saying it is an attempt to undermine the powers of the legislature.

Director-General of SEC, Ms. Arunma Oteh, had written a letter to the committee, informing it of her inability to appear before it. Her inability to appear, she said, is as a result of a meeting of the Nigerian Economic Management Team, of which she is a member.

El-Sudi, who read her letter to the committee, frowned at her absence, saying the legislature is independent of the executive and should not be hindered from doing its work by any activity of the executive or other arms of government.

“Nigerians should understand that the legislature is the only democratic structure in this country. If we undermine that, we are undermining the entire democratic process,” he noted.

Continuing, he said: “During the military era, it is only the legislative arm that was absent. The Executive and judiciary were present. Nigerians should not undermine the legislature.

“Attendance of  meetings seminars and others are not as important as legislative activities. This is a warning to everyone that would want to undermine the legislature.”


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