By Gabriel Omoh, Peter Egwuatu, & Michael Eboh
Mixed reactions have continued to trail the removal from office of   Professor Ndi Okereke Onyiuke as Director General of the Nigerian Stock Exchange (NSE) and Alhaji Aliko Dangote as President of Council of the Exchange, a situation many capital market operators and stakeholders attributed to personality and ego clashes.

Onyiuke

Market operators disclosed to Vanguard that there was no basis for both Dangote and management of the NSE led by Onyiuke to wash their dirty linen in the public, while blaming the crisis on the absence of good corporate governance as obtained in the advanced stock exchanges.

The Securities and Exchange Commission (SEC) last week wielded into the crisis rocking the Exchange by removing both Onyiuke and Dangote from office. According to the Director General of the Commission, Ms. Arunma Oteh, “The Investment and Securities Act (ISA) 2007 vests the unalloyed responsibility for safeguarding the interest of the public and protecting the investor on the Securities and Exchange Commission. The Commission has closely followed the developments in the Exchange, particularly with respect to inadequate oversight of the NSE , ongoing litigation, allegations of financial mismanagement, governance challenges, and the inordinate delays in the implementation of the succession plan for the Exchange. In following the developments, the Commission has at all times carefully deliberated on the implications and ramifications of a direct intervention in the affairs of the Exchange.

“In this deliberation, the Commission weighed the consequences on the market of a direct intervention set against the broader goal of safeguarding the interest of the public and protecting the investor.

The Commission has decided that it is in the interest of the public and necessary to protect the investor to issue the following directives. That the Council Member elected as President of the Exchange in defiance of the Court order cease acting as the President pending the outcome of the ongoing litigation; Council Members elected in defiance of the Court order cease acting as members of the Council pending the outcome of the ongoing litigation; current Director_General of the Exchange, Professor Onyuike, be removed from the office of Director General/Chief Executive Officer of the NSE; Affairs of the Exchange to be managed by an Interim Administrator appointed by the Commission pending the selection of a new Director General.”

Commenting on the sack of the duo by the Commission, Mazi Okechukwu Unegbu, Former President of Chartered Institute of Bankers of Nigeria (CIBN), said, “Government institutions should be careful with certain actions they take. Government should be proactive in certain actions. The Commission would have allowed Onyiuke to proceed on leave rather than asking her to step down. Leaders should be mindful of their actions. They should take the interest of  investors both local and international into consideration. Talk less and act more. The intervention of SEC is in order but the way it was executed may erode the confidence of the market.”

Mr. Emeka Madubuike, Managing Director, Compass Securities Limited, said, “I am confused. The Commission did not give both parties opportunity to talk. However, we know the crisis was getting to the climax..

What we need now is anything that is capable of increasing market performance.”    In his view, Chief Ben Omanukwue, Managing Director, Krabo Nigeria Plc, said, “The action of SEC is political.

Dangote who insisted Onyiuke should either resign or tender apology said so because he wants to tarnish the image of the madam DG. It is only two months before Onyiuke retires. For Dangote to champion Onyiuke’s exit is seen from the angle that he should not go down alone. I see it as political, otherwise, how many cases has Dangote had since his advent into the NSE?

Speaking with Vanguard, Managing Director, Proshare Nigeria, Mr. Femi Awoyemi said, “the crisis in the NSE is on personal differences and that should not extend to formal institution that is at the heart of most Nigerians. Dangote has gone too far ignoring the image of the country. There are better ways to resolve personal differences. The Exchange is not a political arena as this crisis does not augur well for the development of the market and the nation in general.

“There are many ways that the issue could be resolved without tarnishing the image of the institution. As the leader of the Council of the NSE, Dangote has various options that could have been approached. In the first instance, as President of the Council, he can query the DG ; Call for emergency meeting of the Council and even summon the auditors for any anomaly that he finds in the Annual Report. So I don’t see most of the allegations as genuine otherwise there was no basis for exposing an institution to which he occupies the highest position.

This shows poor leadership trait and poor judgement and lack of corporate governance. So there is need for an independent person to investigate these allegations. The auditors of the Exchange should also be involved in this case since they audited the accounts being alleged as misrepresented.”

National Secretary of Independent Shareholders Association of Nigeria (ISAN) and a director of May and Baker Nigeria Plc, Mr.Adebayo Adeleke, in his opinion over the crisis rocking the Exchange said, “let the parties involve come out and tell us what is really tearing them apart. We are yet to hear the genuine issues and it must come out from them. My concern is the impact it is going to have on the market.

There is no integrity on the person coming to be at the helms of affairs of an institutions where virtually all Nigerian has stake. This is a market that has been solidly built over the years and suddenly somebody wants to destroy it.  Where has he been since he became a Council Member of the Exchange.

It is now he knows the Exchange is broke. This is one of the reasons why shareholders groups do not want him to become the President of the Exchange. When we dragged him to court opposing his election as President of the Exchange, some people said we were being sponsored. But with the latest development we are vindicated. The case is in court and so I will not comment further.”

Mr. Boniface Okezie, in his view said, “I don’t see it as a crisis since Dangote has been part of the system that he is accusing. If he said the Exchange is corrupt then he is part of the corruption. This has been one of the reasons why the shareholders groups are objecting his presidency. The matter is in the court. He has been the Second Vice President of the Exchange for four years and did not raise any eyebrow on the account and now that he is having issues with the Exchange he is now saying the institution is bankrupt.

How can an institution be said to be bankrupt when it is still servicing its debt.  Workers were not  laid off. The only thing that happened was that it reduced salary rather than cutting jobs. So I don’t really see any reason for the public mess. In the first place, the Council of the Exchange was not aware of the allegations made by Dangote, in which case his recourse to the Commission may be considered hasty and premature, assuming there is substance to his claims. By the allegations, Dangote has confirmed  the suspicion that he is bent on destroying the Exchange, following the ruling of the Federal High Court nullifying his acclamation as the President and Chairman of the Council of Nigerian Stock Exchange.

“My fear in this issue now is the negative impact it will bring to the market. Already we are experiencing recovery caused by the global meltdown and another in-house fighting is on.  The NSE is not holding investors’ money. It is only providing platform for people to invest. So where is it making the money that Dangote has claimed it has mismanaged. His attitude is just embarrassing Nigerian government and people.

The negative impact is that investors would be discouraged to bring in their portfolio investment into the country and even lead to capital flight. An Exchange that he has been part of  for not less than four years is now said to be fraudulent. Does he want to rubbish the Exchange, for what purpose? Let him come out and tell the masses. No single person is greater that the nation.”

Mr. Seye Adetunmbi, Chief Responsibility Officer, Value Investing Limited, in his reaction said, “NSE is a big institution that thrives on public trust, investors’ confidence and goodwill of the national economy. This makes the institution to be bigger than individuals. The Nigerian stock market  has benefitted tremendously from the integrated goodwill of the public and government in the past 60 years, its present size is therefore not an overnight matter.”

“Consequently, activities of NSE, charged with the coordination of the stock market operations over the years, is prone to public scrutiny and unbiased public court. In essence, NSE operations cannot be shrouded in  secrecy. Transparency, discipline and professionalism are the virtues that can keep the house together on an enduring note. Thus, if the President of NSE raises issues on the state of affairs in the institution, it should give every well-meaning stakeholder concern.

The honorable way out for the management is state their case and submit themselves to an independent audit. If in the process, any recklessness is established, then all the culprits must be penalized appropriately. If big institutions in the organized private sector can not get it right, how are we going to call the public sector to order with the way national affairs are managed?

“One thing that is intriguingly disturbing is how NSE could still retain the top management till date when the market suffered colossal losses due to systemic failure of the self regulatory body to live up to basic expectation while the banking sector and SEC had witnessed  restructuring and fundamental changes. This to me is the crux of the  matter and the challenge of the market which hopefully the recent
petition of Dangote should address conclusively.”

A stockbroker who preferred anonymity, said, “the Director General of SEC met with stockbrokers to formally announce the removal of Professor Ndi Okereke Onyuike and appointment of a forensic auditor, Emmanuel Ikhazoboh, as Interim Administrator for The NSE.

The ex-DG was relieved of her duties after spending ten years in office. During that period, she successfully presided over a transformation program which elevated the Nigerian Stock Exchange to world class status. However, several controversies trailed her tenure, the last of which culminated in her unceremonious removal today (Thursday).

“Her integrity was called to question several times in the past especially during the Trade Alert crisis when the CIS leveled some allegations of corruption against her. There was also the conflict of interest saga which entangled her while serving simultaneously as Chairman of a quoted company and the corruption scandal which culminated in the sack of Tom Iseghohi as CEO of Transcorp.

“Finally, the recent crisis in the Council of the Exchange which pitched her against a top Council member who has leveled allegations of gross financial misconduct against her, has called to question the moral ground for her continued stay in office.

To protect the market from crisis of confidence forced on it by the feud and ensure independent investigation of the allegations, SEC has justification in removing her forthwith and appointing an interim administrator since she failed to put a credible succession programme in place, one month to her exit. With the appointment of a new head of Council by SEC, it is expected that normalcy will be restored to the affairs of the Stock Exchange in due course.”