Trouble is brewing between the Dealing member firms of the Nigerian Stock Exchange, NSE, and the Securities and Exchange Commission, SEC, over the deployment of police team to the commission by the Director-General, Ms Arunma Oteh.
The reason behind the deployment would form the main thrust of the Capital Market Committee’s meeting holding today, Tuesday, 29th September, 2012, at the commission’s Lagos office, the President, Association of Stockbroking Houses of Nigeria, ASHON, Mr Emeka Madubuike, told Vanguard.
While the ASHON boss admitted that the SEC could engage the police, he said that allowing them to reside permanently in the commission was unacceptable.
He said, “Primarily, what we intend to do is to engage the SEC to know why and what purpose the deployment will serve. I think we are going to do that engagement when we meet on Tuesday for the CMC meeting.
“We just need to get additional information on that so that we won’t be jumping the gun. SEC actually can fight fraud, SEC can collaborate with the police without necessarily involving them in the manner they are doing.”
He observed that whatever explanation she provides at the meeting would determine the position the ASHON would take on the matter.
Corroborating his view, the immediate past President of ASHON, Alhaji Rasheed Yussuff, said that SEC would be required to explain the modus operandi of the police in the capital market.
He noted that already, they have procedures and processes of settling disputes arising from transactions in the market, saying that an aggrieved investors is required to go through the NSE, and then the SEC in an instant where he is not satisfied with judgment given by the NSE.
“At what point are they going to invite the police to make arrest if they actually want to use them to check fraud in the market. Will they just bring in the police to make arrest immediately an investors lays compliant?
“Normally, an investor is supposed to approach the Nigerian Stock Exchange if there is any report to make; if he is not satisfied, the case can be referred to the SEC, and then the Investment and Securities Tribunal, IST. So, SEC actually still needs to do more explanation on this,” he said.
Also speaking, Garba kurfi, Managing Director/CEO APT Investment and Fund Limited, said that the initiative could demoralise investors, both local and foreign, due to the battered image of the police.
“A foreign investor will not like to come here and start going through the rigours of adjudication. Capital market cases are settled through arbitration. In most cases, when a foreign investors is coming to your market and it is the police that will adjudicate their case, they will make a rethink. They will first think of the time it will take to get judgment. I definitely think we need to get more explanation,” he enthused.
He continued, “capital market is a special market. If there is any fraud, it is easy to trace and know who is involved. So, for me, capital market is such a place where you cannot perpetrate evil and get away with it no matter how smart you are. We have various records kept by Registrars, brokers, Central Securities and Clearing System, CSCS and even SEC. So for me, I don’t think this is necessary.”