The National Chairman, Constance Shareholders Association of Nigeria, Shehu Mallam Mikail , in this interview with Vanguard, spoke on issues bothering on regulators in terms of corporate governance practice, sanctions and levy imposed on operators in the nation’s capital market.
By Peter Egwuatu
SOME operators in the petroleum marketing sector of the nation’s capital market are complaining of regulators involvement in the importation of fuel which had impacted negatively in their financial performance. What is your take on this?
Yes, the operators are right to complain as regulators are not meant to regulate and at the same time operate in whatever industry. Regulators in whatever industry are expected to come up with policies and regulations that are expected to promote activities of operators in any sector of the economy. But what you see in Nigeria is some regulators also playing in the market.
For instance, Nigerian National Petroleum Corporation, NNPC, is a regulator and as well an operator. Instead of NNPC regulating the petroleum sector, they are also involved in the business of the operators they are regulating. What is the role of corporate governance in this situation? In this scenario, there will not be fair play in the business and that is why the operators in the petroleum marketing sector are complaining and that is why there revenue and turnover keep dropping and this in turn affect returns on shareholders’ investment.
Are you saying that regulators do not abide by the principle of corporate governance?
Of course some operators do not keep to the principle of good corporate governance. In this case of NNPC, is it not clear that they do not adhere to the principle of good corporate governance? Since they are operating as regulator and operator, there will not be fair and good environment for the operators to function effectively. How do you want operators to make profit for their shareholders when you have a regulator acting as a monopoly playing the market. So some regulators are performing in line with good corporate governance. It shows that this present government does not know what it takes in corporate governance practice.
What is your take on regulators imposing different fines on companies they believe have erred in their operations?
I am in support of those fines imposed on companies that misbehaved in the course of their operations. It will make the companies take corrective measures once they are fined to prevent a reoccurrence. When companies are violating the rules of the business they should be sanctioned appropriately.
What about development fees and other levies imposed by regulators on companies. Do you think it is proper in line with principle of corporate governance?
I am not in support of some of the regulatory fees and other unnecessary levies imposed on companies. Some regulators have their own hidden part of the business. For instance, Asset Management Corporation of Nigeria, AMCON has no business imposing fees on companies. AMCON was set up for a particular purpose and with ten years tenure to exist. Why should operators keep funding the Corporation? AMCON has outlived its usefulness and it is illegal collecting fees from companies to support its continued existence.