The ongoing public hearing by the House of Representatives Committee on Capital Market to unravel the cause of the near collapse of the country’s stock market in 2008 apears to be degenerating gradually to a blame game and personal attacks between the former Director-General, Nigerian Stock Exchange (NSE), Ndi Okereke-Onyuike, and the Director-General, Securities and Exchange Commissoion (SEC), Arunma Oteh.
Ms Oteh had told the Committe on Monday that Mrs. Okereke-Onyuike’s masterminded “a debilitating era of broad financial abuses and violations of processes” that culminated in the eventual destruction of the market and erosion of investors’ confidence in the system.
But in her reaction to the SEC boss’ allegation, Mrs. Okereke-Onyuike accused the new leadership of the Commision of discrediting her administration to camouflage its attempt to hijack the stock market.
The former NSE boss also claimed that by virtue of the May 20, 2011 judgment of a Lagos High Court, which awarded her N500million compensation for alleged illegal dismissal, she remained the lawful Director-General of the NSE.
However, SEC in a swift reaction Tuesday night disputed all the claims, pointing out that several of them were downright false.
“SEC’s intervention was the only way to cut short her reluctance (quit). It was the only way to put paid to the regime of unaccountability and financial recklessness, which she had instituted to the point that the exchange was on the verge of bankruptcy,” SEC said in a statement.
On claims by Mrs. Okereke-Onyiuke that SEC only appealed the award of damages to her, the Commission noted: “This is entirely false, because the appeal filed by the SEC was against the entire judgment. The appeal challenged both the substantive judgment as well as the award of N500million, which was not sought for.
On claims that the SEC and Central Bank of Nigeria (CBN) approved the “Offer Prospectus” for “Private Placements”, which have remained unlisted on the NSE, SEC also dismissed it as entirely incorrect, pointing out that at no time did the Commission ever approve offer documents for vendors of private placements.
“We decry this recourse to deliberate falsification of facts by Okere – Onyiuke under oath. We invite her to deposit proof of this fabrication in the public domain. As a matter of fact, the SEC had placed a number of “buyer beware” advertorials in key national daily newspapers advising the investing public that private placements were beyond the regulatory purview of the SEC,” it said.
She also denied allegations that SEC was not performing its market development responsibility, pointing out that the Subcommittee system, which has been revitalized by the SEC, is a market–wide development initiative intended to confront all areas of deficiency in the market.
“The recent investor outreaches in Sokoto, Port Harcourt and Kano as well as ongoing capital market awareness programmes in secondary schools and universities, and market wide capacity building in collaboration with sister regulatory agencies and multilateral financial institutions, are all instances of market development effort undertaken by the SEC.”
On the NSE’s trading platform, SEC said all that is important, from a regulatory point of view, is that appropriate machinery has been set in motion to overcome the challenges posed by the platform bequeathed by Mrs. Okereke–Onyiuke through wholesale replacement.
“Contrary to the misinformation about the trading platform, the truth is that the platform has a lifespan, which lapsed in December 2011. It is not a renewable or upgradable technology.”
It claimed that prior to her removal, Mrs. Okereke– Onyuike, had initiated the process of acquiring a loan of $20million from African Export – Import Bank, AFREXIM Bank for replacing the NSE trading platform. This is the same platform that the current leadership of the NSE has concluded arrangements to procure from the same supplier at $10million!
SEC said on succession planning, Okereke – Onyiuke claimed that she had a succession plan in place.
“Contrary to this, it is common knowledge that she kept vacillating on succession and delaying her exit despite having spent N10 years in office as Director General and 26 years in the employment of the NSE in senior managerial cadre,” the statement added.