BY PETER EGWUATU

The issues and malpractices that characterised   the market before 2009 and led to the collapse of the Nigerian capital market is yet to be raised and addressed by any of the stakeholders that have spoken in the on-going probe by the House of Representative ad- hoc committee on the Capital market.

Since the House of Representative ad-hoc committee resumed hearing last week after the sack of the former Chairman of House of Representatives Committee on Capital Market, Mr. Herman Hembe and  other  members due to bribery allegations, stakeholders that have  spoken so far are yet the hit  the nail on the head.

There must have been certain malpractice and unheathy issues that triggerd the collapse of the market which would have led to the appointment of  the incumbent Director-General, Ms Arunma Oteh.

The committee should be in a position to find out steps taken so far by the Commission to correct the anomalies, redeem the market  and restore investor confidence.  It should be able to know whether the steps taken are capable to lift the market in the nerest future.

In fact, most of the stakeholders who have spoken so far in the two sittings of the on-going probe blamed some policies of the Central Bank of Nigeria (CBN), Nigerian Deposit Insurance Corporation (NDIC) and the Assets Management Company of Nigeria (AMCON) and Securities and Exchange Commission (SEC) for contributing to the collapse of the market.

The stakeholders equally advocated for the enactment of a law that would make it mandatory for all multinationals operating in the country to list on the Nigerian Stock Exchange (NSE).

Specifically, President of the Chartered Institute of Stock Brokers, Mike Itegboje while testifying before the panel said the way out for the dismal state of the market is for the CBN to extend a bail- out to it.

According to him, “The capital market should be bailed out like the banking sector. All stakeholders must restore the confidence of the investors.”

He also called for the abrogating of the Value Added Tax (VAT) on capital market transactions explaining that any form of tax including stamp duties should be removed from listed transactions.

In his words, “The Nigerian capital market is “bleeding” and unless the National Assembly enacts a law compelling multinationals from listing in the market, the bleeding will not cease.

“Mobil, MTN and other multinationals are listed in US and South Africa, why can’t they do it here? Is it because it is Nigeria. “We need to invoke the doctrine of necessity to restore the capital market.”

Furthermore, Mr. Boniface Okezie , who spoke on behalf of Provider of Funds for the Capital Market, blamed the government for contributing to the collapse of the market by flouting its own law in appointing a person without capital-market experience to head SEC.

House of Reps Speaker, Tambuwal

“Government is part of the problem of the meltdown because it should have appointed someone who has knowledge and experience of the capital market to head SEC,”

Okezie said. “The problem is that we make laws and we violate them. The law clearly states that the director-general of the Securities and Exchange Commission must be a chartered stockbroker and must have 15 years experience as a stockbroker.”

He stated that other markets had been through their own meltdown, but the Nigeria capital market is still battling with its own problems.

According to him, “ “If we had followed that law, we would have been getting out of the problem today because if the person heading SEC had the knowledge of how the market works, she would have been in a proper position to advise the CBN that the step it was taking on the nationalisation of banks was wrong.”

Also, the Association of Stockbroking Houses of Nigeria, represented by Mr. Emeka Madubuike, called for a revision of the nationalisation of the banks with a view to compensating the stakeholders.

“Our position is that the shareholders should be given some shares in the new companies as a form of compensation just like the three other banks, which were bought over, did,” Madubuike said. “Something should be given to the existing shareholders, at least on moral ground.”

He exonerated stockbrokers from the events that led to the buy-over of the bank by CBN, saying “We didn’t do anything about it because we were also affected. We woke up one day and found out that the banks were gone. But we recommended to our clients to seek redress in the court.”

Madubuike told the committee that the Securities and Exchange Commission is deviating from its role as regulator of the stock market by getting involved in the micro management of the stock exchange.

Acknowledging that SEC was carrying its interventionist role in the stability of the capital market, he said it was time for it to take a bow since the board and other relevant structures of the NSE have already been put in place.

“The intervention is taking too long and therefore there is the tendency for it to even impair on the operations of the stock exchange. We are saying that the intervention should stop, especially at the board level” he noted.

Meanwhile, it should be noted that the ad-hoc committee has the primary responsibility to investigate issues and practices that led to the collapse of Nigerian capital market and the way forward to turnaround the market for the growth and development of the economy in general.

Furthermore, at the first week of the hearing, the ad-hoc committee succeeded in inviting former CBN Governor, Professor Charles Soludo, and embattled former GMD of defunct intercontinental Bank, Mr. Erastus Akingbola and former convicted GMD of defunct Oceanic Bank, Mrs. Cecilia Ibru to appear before it unfailingly on April 20, 2012.

Others invited also are the former DG of the Nigerian Stock Exchange (NSE) Ndi Onyuike-Okereke, former DG Securities and Exchange Commission (SEC) Musa Al-Faki, former MD of Bank PHB, Mr. Francis Atuche, former MD of FCMB, Mr. Okey Nwosu and that of IMB, Mr. Sebastine Adigwe.

The invited individuals were expected to shed light on their stewardship with regard to the happening in the capital market.

Unfortunately, the people could not appear on the scheduled date as hearing was postponed to Tuesday, 24th April 2012.

It will be recalled that following the pronouncement of the newly reconstituted ad-hoc committee, its chairman, Ibrahim El-Sudi assured all stakeholders that the panel will not witch-hunt anybody but look critically at issues and recommend way forward.

Therefore, the ad-hoc committee should not derail from its primary responsibility of knowing what led to the crash of the market in 2009 so that remedies could be preferred at the end of the exercise.

The committee should be able to ask stakeholders, operators and regulators in specific terms issues they felt led to the meltdown. There are many unpalatable issues and practices that contributed to mar the market and eventual loss of confidence. If these issues are known, then the ad-hoc committee should ask the regulators what actions had been taken to address the identified problems, rather than attacking personalities. This is because all stakeholders are culprit to the market meltdown in one way or the other.