It is no longer news that the ongoing capital market probe at the National Assembly was mooted to set out clear framework for sound regulatory platform that will lift the market out of the abyss where it is today and to prevent re-occurrence of the trends that crashed it.
What is the current news now is that the ensuing drama by the principal actors especially the former Director-General of the Nigerian Stock Exchange, Professor Ndidi Okereke– Onyiuke, and the Director-General of the Securities and Exchange Commission, Ms. Arunma Oteh have continued to bring out more disclosures.
Investigation by the House of Representatives committee on capital market took a dramatic twist as the gladiators in the Nigerian capital market were locked in counter accusation of corporate governance lapses.
Oteh while giving accounts at the resumed hearing of the House of Representative ad-hoc committee probing the near collapse of the capital market, blamed the lapses on corporate governance and financial misappropriation of funds by former council members of the Nigerian Stock Exchange (NSE) as the main reasons that brought the market to disrepute.
She noted that the former council members carried out fraudulent transactions which included the purchase of N186 million worth of Rolex wristwatches without proper accounts and a yacht for N39 million.
According to her, “It was brought to my attention that there were incidences of financial scheming, misappropriation, false accounting, misrepresentations, and questionable transactions.
“For instance, the council of the NigeriaN stock Exchange bought a yacht for N37 million and wrote down the book value within one year by recognising it in its books as a gift presented during its 2008 long service award. Yet there are no records of the beneficiary,” she said.
Oteh also said that the council of the stock exchange also spent N186 million on the purchase of 165 Rolex wrist watches, as gifts for awardees out of which only 73 were actually presented to the awardees. The outstanding 92 Rolex watches valued at N99.5 million remained unaccounted for. These were the kinds of financial imprudence that were perpetrated at the Nigerian stock exchange,” Oteh said.
Oteh had also during her presentation to the committee, alleged that the NSE council, under Okereke-Onyiuke’s leadership, misappropriated over N1.5bn.
However, Okereke– Onyiuke , defending the allegations before the panel, explained that the watches were bought for awardees who had spent 48 years in the Stock Exchange.
She noted that, the expenditure was approved at the Annual General Meeting of the NSE, after it had also adopted the audited accounts of the organisation.
Okereke-Onyiuke, therefore, described the allegation as pure fabrication to support the illegality of the invasion of the NSE by SEC in August 2010.
“It was shocking to me when people came to talk to the committee about issues that were purely private. It was all to justify the illegal invasion of the NSE by armed policemen from SEC,” she added.
While responding to this, Okereke-Onyiuke explained that the money was generated from fees, which the shareholders agreed to spend on hosting the NSE 48th anniversary.
“It is not anybody’s money; the Stock Exchange doesn’t take public funds. This is a private organisation that makes money from operating fees and bonuses. You don’t ask somebody, how do you spend your money? We didn’t steal anybody’s money,” she stated.
Speaking on reasons for the crash of the market in 2009, Okereke-Onyiuke blamed it primarily on the crisis in the banking industry.
The banks controlled 60 per cent of quoted securities; so when they had a problem, it affected the market. No other quoted companies had a problem,” she noted.
However, following the activities in the market closely since the hearing commenced, one will be tempted to believe that since the Daniel has come to judgment after groping in the dark since 2008 and nobody thought of how to arrest the situation because every other panacea had been tried.
There seems to be a light at the end of the tunnel, this is because market watchers believe the probe is going to bring a positive change which according to them, a check in the last three weeks on the activities in the market revealed that the reaction from the market has been positive and it shows that the market needs the current drama playing out at the hearing.