Imported User:
Ms Arunma Oteh, the Director-General of Securities and Exchange Commission (SEC) on Monday in Abuja accused past directors-general of the commission of financial mismanagement.
Oteh made the allegation at the ongoing public hearing of the Ad hoc committee on the operations of the Nigerian Capital Market.
According to her, a report of an inspection team handed over to her when she resumed showed that the Exchange spent N186 million on 165 Rolex wrist watches as gifts for awardees.
She said that only 73 of the watches were actually presented to the awardees while the outstanding 92 Rolex watches valued at N99.5 million remained unaccounted for.
``These are the kinds of financial imprudence that were perpetrated at the NSE. These transactions were routed through companies owned by some senior officers of the Exchange.''
Oteh said that the team also found out that the NSE Investor Protection Fund was not properly administered.
``It was also brought to our attention that there were incidences of financial scheming, misappropriation, false accounting, misrepresentation, and questionable transactions.
She said that the NSE bought a yacht for N37 million and recorded it as a gift presented during its 2008 Long Service Award without records of the beneficiaries.
She said that other notable fraudulent transactions include the reclassification of N1.3 billion originally spent on business travels.
Oteh maintained that out of the N1.3 billion, the sum of N 953 million was reclassified under "Software Upgrade" and subsequently expended rather than being capitalised.
The SEC boss also alleged that the NSE failed to submit its 2009 audited financial statements by June 30, 2010, six months after the end of the period as required by the Investments and Security Act (ISA).
``In addition to violating the ISA, these developments undermined market integrity and eroded investor confidence.''
According to Oteh, abuses carried out between 2006 and 2008 were responsible for the continued investor apathy in the market.
She alleged that between 2006 and 2008, the Executive of Finbank engaged six law firms to incorporate 95 companies and transferred billions of depositors’ fund to nine of these companies and purchased 2.8 billion units of its own shares.
Oteh said that the commission had instituted legal proceedings against 260 entities and individuals for unethical practice.
``We have taken various enforcement actions against different capital market stakeholders with respect to inadequate filing of periodic returns and other market infractions."
She attributed the crisis in the capital market to inadequate rules guiding specialised transactions in the market.
