The removal of the CEO and Chairman of the Nigerian Stock Exchange by the SEC
With the news of the dismissal of Prof. Ndi Okereke-Onyiuke and Alhaji Alinko Dangote, CEO and Chairman of the Nigerian Stock Exchange (NSE) respectively by the leadership of the Securities and Exchange Commission (SEC) on August 5 2010 has been characterized by all kinds of controversies.
This came as a shock as most investors are expecting brighter days as the NSE recently approved the Asset Management Company (AMC) trade as a positive tool to revive the bear market.
Interestingly, NSE is a self-regulatory authority for the Nigerian stock market and a non-governmental organization with a council that runs the affairs of the exchange. They are also in charge of resolving any financial dispute involving shareholders/investors and market operators.
The Securities and Exchange Commission, on the other hand, is also a self-regulatory body that oversees the functioning of the Nigerian capital market and the registration of all financial companies in accordance with the Companies and Allied Affairs Act, CAMA. They also receive all material or confidential trading records from all brokerage houses as part of complying with the rules and regulations that govern the market.
First of all, let’s see the causes that led to the dismissal of the two top helmsmen of the NSE.
There has been a bitter confrontation between the CEO and the President of NSE in overtime. This has been evident with ongoing litigation, allegations of financial mismanagement, governance challenges, and inordinate delays in implementing the succession plan for the exchange. Alhaji Alinko Dangote recently went public with the bombshell that the NSE is broken. This further fueled the lack of confidence imposed on them by concerned Nigerian investors.
According to the SEC’s CEO, Ms. Arunma Oteh, yesterday (Aug 5, 2010) stated that “the dismissal of the CEO of the Nigerian Stock Exchange (NSE), Prof. Ndi Okereke-Onyiuke and his ‘ Chairman, Alhaji Alinko Dangote was in the best interest of the capital market and investors, as enshrined in the Securities and Investments Act (ISA) of 2007.”
the innkeeper
Do you think that the SEC leadership was hasty in their decision to remove the aforementioned individuals without proper investigation into the matter before launching the gavel? Or was it done in good faith to protect the Nigerian capital market in the words of Ms. Arunma Oteh? Also, would you agree to the appointment of a forensic expert, Mr. Emmanuel Ikhazoboh, to head the NSE in the interim without extensive experience in the Nigerian stock market?
With the ongoing reorganization of NSE, are we going to experience another turnaround like the CBN led by Sanusi Lamido Sanusi did in the banking industries? The difference between the NSE reorganization and the CBN reform was that the former did not investigate the allegations that rocked the NSE before taking action.
Would you conclude that these SEC actions would create upsides or downsides for the Nigerian capital market as Nigerian investors are unsure about the uncertainties of the Nigerian capital market?