Nigeria News Update: Stock Exchange Director Sacked

Director-General of the Nigerian Stock Exchange.
Originally uploaded by Pan-African News Wire File Photos

SEC: Why We Struck

Ikazoboh is interim administrator

CBN, stakeholders back intervention

Nigeria ThisDay
By Goddy Egene, Emele Onu and Abiodun Eromosele,
08.06.2010

Director-General, Securities and Exchange Commission (SEC), Ms. Arunma Oteh, yesterday declared that the removal of the Director-General of the Nigerian Stock Exchange (NSE), Prof. Ndi Okereke-Onyiuke, was in the best interest of the capital market and investors.

SEC had last Wednesday ordered the removal of Okereke-Onyiuke as the DG of NSE following the face-off between her and business mogul, Alhaji Aliko Dangote.

The commission also directed that the council member elected as President of the Exchange (Dangote) in defiance of the court order should cease acting as the President pending the outcome of the ongoing litigation.

Similarly, council members elected in defiance of the court order are to cease acting as members of the council pending the outcome of the ongoing litigation.

Apart from appointing a forensic expert, Mr. Emmanuel Ikhazoboh, as Interim Administrator, the Exchange, SEC yesterday announced Mr. Ballama Manu as the Interim Head of the Council to steer the Exchange through this critical period of uncertainty on account of the pending litigation regarding some status of the individuals.

Justifying the action of the commission, Oteh said SEC had to move in to safeguard the interest of the investors as enshrined in the Investment and Securities Act (ISA) 2007.

“The commission has closely followed the developments in the NSE, particularly with respect to inadequate oversight of the exchange, 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,” she said.

Oteh said the former NSE DG was informed of her sack yesterday morning and that the interim administrator is to manage the daily affairs and operations of the exchange until the conclusion of the recruitment and assumption of duty of the substantive DG of the NSE.

She explained that Ikhazoboh is to also oversee the transformation programme started by the NSE in 2008, key aspects of which include ensuring that a modern and world-class trading platform is developed.

Oteh said that the interim management team is expected to conclude its assignment “as quickly as possible”.

She reaffirmed the commitment of SEC to in ensuring that the integrity of the market is restored apart from protecting investor interest.

She said the actions taken “will lead to long term improvements in the state and the activities of the exchange, thereby safeguarding the interests of investors”.

Also speaking at the media briefing, Ikhazoboh said he was very happy with the warm reception he got from the management and staff of the NSE, saying he would accomplish the task before him as quickly as possible.

“Since my arrival, stockbrokers, top management among others have been very cooperative. All of them are very enthusiastic to make sure that market does no slide any more. My responsibility is to ensure that the market is stabilised, that integrity is brought back into the system and to ensure that the back office – administration, finance among others are put back to shape. And also to run the transformation to a point where a DG is appointed and I will need the cooperation of everybody to achieve this feat,” Ikhazaboh said.

The President of Chartered Institute of Stockbrokers (CIS), Mr. Mike Itegboje, the Chairman of Association of Stockbroking Houses of Nigeria (ASHON), Alhaji Rasheed Yusuf, among others pledged the support for the efforts aimed at restoring investor confidence.

Meanwhile, while there were rumours of Okereke-Onyiuke going to court to challenge her removal, Dangote was said to have earlier offered to temporary step aside as the President of the Council pending the determination of the case in the court last Monday.

A statement from Dangote Group yesterday said that in a letter signed by his Counsel, Rickey Tarfa, dated Monday, August 2, 2010 and addressed to the DG of SEC, that Dangote offered to temporarily step aside for the council to revert to the status quo which is the position of things before the August 4, 2009 when the court made an order nullifying the election.

“In order to resolve the current impasse, we suggest that the council temporarily reverts to the status quo, which is the position of things before the August 4, 2009 order, so that the Council can continue to work unchallenged through its Committees. By reverting to the status quo, Dangote will serve and function as the 1st Vice President of the Nigerian Stock Exchange, pending the outcome of the suit,” the statement said.

Reacting to the development, a stockbroker said the change was overdue but faulted the procedure used by the commission for the removal of the DG.

The General Secretary of Independent Shareholders Associations of Nigeria (ISAN), Mr. Adebayo Adeleke, said the action was “an overkill”.

“The issues involved a company that is limited by guarantee. The issues would have been referred to the council and in the absence of a council the shareholders would have been allowed to meet and decide. But this was not done. They were not given an opportunity for fair hearing. It is an overkill,” Adeleke said.

Meanwhile, the Central Bank of Nigeria (CBN) and other stakeholders in the capital market have expressed support for the intervention of the SEC on the NSE.

CBN Governor Sanusi Lamido Sanusi commended the Director General of the SEC for her action, which he said reflects her determination to clear the mess at the nation’s stock exchange.
Sanusi, who spoke in a keynote address titled "Enhancing the Flow of Credit to the Manufacturing Sector in Nigeria Through the Ongoing Banking Sector Reform" at the Annual General Meeting of the Manufacturers Association of Nigeria (MAN) yesterday, pointed out that the actions of the SEC’s leadership underscore the need for a comprehensive reform of the financial sector.

Also, former President of the Chartered Institute of Bankers of Nigeria (CIBN), Mazi Okechukwu Unegbu, who is also a market operator, said the step taken by SEC is a welcome development.

Unegbu, who is also a lawyer, former managing director of Spring Bank Plc, however, pointed out that there are errors in the procedure SEC used to intervene, which he noted need be corrected.

“I think the SEC should check the Investment and Securities Act (ISA) whether it acted rightly. What it did was to storm the Exchange with security operatives, which also does not seem right. There is no war going on at the stock exchange so why do they have to invite the security operatives,” he said.


A stock broker, Mr Idowu Ogedengbe also welcomed the development.

Exit: Madam Ndidi

By Goddy Egene and Abiodun Eromosele, 08.06.2010

Mrs. Ndi Okereke-Onyiuke, the ousted Director General of the Nigerian Stock Exchange (NSE), assumed duty as the Manager and Head of Research and Information Services Department (now Research and Infotech Department) of the Nigerian Stock Exchange in January 1983. Seven years after, she became the Director-General and Chief Executive Officer.

Okereke-Onyiuke’s journey in the corporate world began at the New York Stock Exchange where she rose to managerial cadre before she answered the call to return to help develop her fatherland.

She was good academically, from a young age. At Queen’s School, Enugu, she passed out with Grade 1 in her West African School Certificate Examination in 1965. This was capped with a distinguished performance at Higher School Certificate Examination in same school in 1967. The intellectual strength manifested in her graduation with First Class Honours in Business Administration, Computer Sciences and Economics at the Baruch College of the City University of New York in 1975.

She obtained her Master of Business Administration, (MBA) specialising in Finance and Computer Science at City University of New York, Graduate School in 1977. By 1980, Okereke-Onyiuke had completed her Doctor of Philosophy/Doctor of Administration in Finance and Securities Market at City University Post Graduate centre, New York.

On assuming duty at NSE in 1983, she dazzled the Council and Management of The Nigerian Stock Exchange by strengthening the organisation’s research base. She was highly instrumental to the computerisation of the Exchange in 1985, a development, which included the creation of The Nigerian Stock Exchange All Shares Index - a barometer that gauges the mood of economy.

In the same year, she spearheaded the training of potential stockbrokers by starting off The Stock Exchange’s Authorised Clerkship Examination. Today, the examination is midwifed by the Chartered Institute of Stockbrokers (CIS). The credit goes to her that Nigeria’s stockbrokers have a pride of place in the international stock markets.

She brought her technical know-how to bear on the Exchange at the inception of the Privatisation and Commercialisation Programme of the Federal Government. As the head of the Exchange’s Quotations Department, she was the Chairman for the Technical Committee on Privatisation and Commercialisation (TCPC) now Bureau for Public Enterprises (BPE). Her laudable contributions to the committee’s achievements earned her special commendation from The Exchange and Federal Government of Nigeria.

In April, 1997, her efforts as the Project Director of the Central Securities Clearing System (CSCS) Limited was crowned with success with the commencement of automated delivery that is Central Depository, Clearing and Settlement System. Her concerted efforts with Rasak Oladejo, the Project Director of Automated Trading System (ATS) culminated in the success story of the new trading regime in April, 1999 (T+5) and on March 1st, 2000 (T+3) in line with developments in advanced markets. As an accomplished securities strategist, she emerged as the Chairman of the African Stock Exchange’s Association (ASEA) listing Committee whose mandate is to produce a standardised Minimum Listing Requirements for ASEA Members to facilitate cross border listing in Africa. She has always served on the ASEA Committee on harmonisation of qualifying examination for stockbrokers in Africa.

Her Controversies

Although the contributions of Okereke-Onyiuke to the growth of the stock market are incontrovertible, she was controversial. Her removal from office last Wednesday was under controversial circumstances. While high allegations of financial mismanaged were levelled against her by business mogul, Alhaji Aliko Dangote, she denied all the allegations.

However, the former NSE boss has been involved in many controversies. The first was her involvement in Corporate Nigeria - a group of corporate individuals, who raised funds to support the political ambition of former President Olusegun Obasanjo. She was accused of using her influence as the DG of NSE to cajole listed companies to contribute money to support Obasanjo.

Again, when Obasanjo made her the Chairman of Transnational Corporation of Nigeria (Transcorp) Plc, a company that was floated with the intention of transforming the economy of the nation another controversy emerged. There were complaints that she should not be the Chairman of Transcorp at the same time NSE DG. The Securities and Exchange Commission (SEC) advised her to resign as the chairman of Transcorp. But Okereke-Onyiuke refused to step down, claiming that her chairmanship of the company received the blessings of the NSE’s Council.

The former NSE boss got herself entangled in another controversy. This time on the international scene and involving President Barack Obama of United State. In 2008, she floated an organisation called ‘Africa for Obama’ to raise funds for Obama. And on August 11, 2008, the organisation had a dinner/concert where about N100million was reportedly raised.

Her failure to name a successor when she announced last January that she would retire next November sparked off another controversy - the last straw that broke the camel’s back. The succession crisis led to the resignation of Mr. Lance Elakama, who was her second in command.

The power play between her and Dangote over who control the NSE through the appointment of the next DG was said to have led the face-off between the duo. Following allegations of fraudulent practices and other mismanagement made SEC to step. The result is the removal of Okereke-Onyiuke last Wednesday.


SEC Sacks Okereke-Onyiuke, Dangote

Thu Aug, 05 2010
Times of Nigeria

The lingering crisis on the council of the Nigerian Stock Exchange (NSE) came to a head on Wednesday night, with the capital market apex regulator, the Securities & Exchange Commission (NSE) announcing the removal of Ndi Okereke-Onyiuke.

Okereke-Onyiuke, who has been Director-General and chief executive of the Exchange since 2000, has been embroiled in a accusations and counter-accusations with Aliko Dangote, President of the Exchange until his sack by a Federal High Court in Lagos.

Dangote has accused the NSE of mismanagement about N11 billion, resulting in the exchange becoming insolvent, a sign of which is the about N900 million debt owed to the Central Securities Clearing System Limited, its subsidiary.

The decision by the SEC according to a statement by Lanre Oloyi, an assistant Director and spokesman, is in the interest of the public and necessary to protect the investors. The decision, according to a source is the outcome of a meeting attended by the ousted DG with the Presidency and involving the SEC boss- Ms. Arunma Oteh and Finance Minister, Olusegun Aganga.

Pending the selection of a new DG for the NSE, according to the statement, the “affairs of the Exchange are managed by an Interim Administrator appointed by the Commission,” the statement added, directing Dangote and all those elected to the NSE council in defiance of the court order to cease acting as such, pending the outcome of the ongoing litigation.

“These actions by the Commission reinforce the integrity of our markets and demonstrate commitment to accountability, particularly given the importance of ensuring adequate oversight at all times and demonstrating that when there are shortcomings, as the apex regulator, the Securities and Exchange Commission will step in decisively to address these issues in the public interest and to protect the investors,” the statement added.

Giving a background to the crisis, the commission said the Investment and Securities Act 2007 vests the unalloyed responsibility for safeguarding the interest of the public and protecting the investor on it, following which it has closely followed the developments in the NSE.

This, the statement added, was particularly with respect to “inadequate oversight of the Exchange, 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 promised to announce an interim arrangement before the opening of the market this morning, given “the gravity of the allegations around financial mismanagement of the Exchange, the Commission has also directed the conduct of an independent investigation into the allegations.”


Ikazoboh replaces Okereke-Onyiuke as NSE boss

Cover Stories, Headlines Aug 5, 2010
By Peter Egwuatu & Michael Eboh

LAGOS—SECURITIES and Exchange Commission, SEC, yesterday, named Emmanuel Ikazobo as the interim Director General of the Nigerian Stock Exchange to replace Professor Ndi Okereke-Onyiuke who was fired, Wednesday, in what the regulator described as move aimed at boosting confidence and reinforcing the “integrity” of the market.

Ikazoboh, until yesterday, was a former senior partner at Deloitte & Touche LLP’s West and Central African unit and now the Executive Chairman at Hedonmark Management Services Ltd, currently a Global Client Service Partner for Africa Regional Operations of Deloitte & Touche (Akintola Williams Deloitte).

He was named administrator of the stock exchange, after Ndi Okereke_Onyiuke was removed as Director General and Chief Executive Officer after over 10 years in office.

SEC also sacked the entire Council of the NSE and appointed Mr Ballama Manu its interim President.

The interim management of the council was mandated to complete the transformation of the Stock Exchange and to appoint a substantive director general. They were also tasked to investigate the allegation by the former President of the council, Alhaji Aliko Dangote, against the sacked DG and to proffer solution and remedy.

An influential operator in the market and Chief Executive Officer of Financial Derivatives, Mr. Bismarck Rewane, said:“An intervention was inevitable and imperative, not to indict anybody but to protect the market from drift.

There was a need to draw a line and restore market confidence.”

Debt crisis

The Exchange’s All Share Index, which rallied 24 percent this year to become one of the 10 best performers among 93 indexes tracked by Bloomberg globally, is still down more than 60 per cent from a March 2008 high. The measure fell following a debt crisis caused by investors borrowing to buy stocks before the price crash forced a bailout of some of the nation’s banks.

SEC said in a statement that there was need to address “inadequate oversight of the exchange, ongoing litigation, allegations of financial mismanagement, governance challenges, and the inordinate delays in the implementation of the succession plan” at the Nigerian Stock Exchange.

Okereke_Onyiuke was due to retire in November.

SEC also ordered billionaire businessman, Aliko Dangote, the NSE’s President, and Council members elected against a court order, to “cease acting” in their roles pending the outcome of ongoing litigation.

It will be recalled that in March, a court nullified the election of Dangote as president of the exchange, saying it contravened an existing court order that forbade the vote until a suit challenging his eligibility was determined.

Allegations of “financial mismanagement”of the exchange will also be investigated, the SEC said.

Okereke_Onyiuke couldn’t be reached in her office for a comment, and Joseph Okonmah, spokesman for Dangote, couldn’t also be reached for comments as his mobile phone was switched off.

Samir Gadio, an emerging_markets strategist at Standard Bank Group Ltd.’s London office was quoted as saying that Okereke_Onyiuke’s removal “was expected to some extent,” and that “there were clearly issues there in terms of transparency, poor governance and supervision.”

Trading on the Nigerian Stock Exchange was delayed because of a technical issue, with the market closing at 4:33 p.m. in Lagos, the Exchange said.

Vanguard, however, learnt that Okereke-Onyiuke had concluded plans to head to the courts to challenge her removal by SEC.

Briefing the media on developments at the NSE and the introduction of the interim Director-General and Council Head, Ms Arunma Oteh, Director-General, SEC, confirmed that the NSE had not submitted to the commission, its 2009 financial statement and accounts, adding that the succession plan of the NSE was also breached by Okereke-Onyiuke.

She further expressed confidence that the new appointees would bring their wealth of experience to bear in addressing the governance concerns and allegations of mismanagement levelled against the NSE.

She said: “The wealth of knowledge and experience he brings to the post will enable him to manage the affairs of the exchange until the assumption of the substantive director general.

“The interim period will be of a limited duration and a succession plan is currently being put in place to find a new Director-General for the NSE.”

Also speaking, Ikazoboh promised to pursue a four-point agenda, which include ensuring that the downward trend in the market was halted; restoration of the integrity of the NSE and the capital market; placing the finance and administrative functions of the NSE in proper shape; and the pursuit of the transformation agenda until the emergence of a new Director-General and attainment of a world class capital market.

SEC, EFCC storm Lagos floor of the NSE

Meanwhile, a mild drama was recorded on the Lagos trading floor of the NSE, as officials of SEC and the Economic and Financial Crimes Commission, EFCC, accompanied by a number of mobile police officers and plain clothes security operatives were on hand to enforce the sack.

A source at the NSE informed Vanguard that activities on the floor commenced about a few minutes to seven.

Also, a hitch was recorded in trading, as the trading engine of the NSE collapsed after about 30 minutes into trading. Trading later commenced at about 4.00 p.m, after efforts to rectify the fault were successful.

In a reaction, Chief Responsibility Officer, Value Investing Nigeria, Mr. Seye Adetunmbi, said: “NSE is a big institution that thrives on public trust, investors’ confidence and goodwill of the national economy.

“In view of the aforementioned and by virtue of the orientation and statutory functions to the investing public and quoted companies; NSE is indisputably a public institution. By implication, it makes the Stock Exchange to be bigger than individuals.

“Thus, if anybody raises justifiable issues on the management of the stock exchange, it should give every well meaning stakeholder concern. Now that SEC the apex regulatory body had stepped_in to arrest aberration and uncomplimentary drifts that had been long due; it is commendable.

“The good thing is that NSE is being given a unique opportunity to revisit all fundamental things that have be wrong with the structure of the exchange, compostion of the council and inject fresh ideas capable of re_engineering and boost the dwindling operators and investors confidence in the market.”

A stockbroker who spoke on the condition of anonymity said: “To protect the market from crisis of confidence forced on it by the feud and ensure independent investigations 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 coming up shortly, it is expected that normalcy will be restored to the affairs of the Stock Exchange in due course.”