Probes of whatever form or shape can hardly stir any Nigerian since they have become of late, sources of comic scenes on televisions and striking headlines for the newspapers. During the military era, Nigerians were always apprehensive of any probe since the outcomes were often devastating and persons indicted in such probes were either dismissed from the public service or retired. Since the nation returned to democratic rule, Nigerians have lost count of the number of probes instituted by the executive arm of governments and the legislature alike. But what Nigerians know for sure is that nothing comes out of such probes. And the more painful aspect of it all is the man hour and millions of naira usually spent in organizing such probes.
It is in the same light that the public perceive the ongoing probe of the capital market by a committee of the House of Representatives. Maybe the reconstitution of the committee after the scandal that rocked the sitting of the former one, especially the charges of corruption leveled against the former chairman of the committee by the Director-General of the Securities and Exchange Commission (SEC) may compel the committee to concentrate on the real task before it and stop the show of shame associated with the former team.
Going forward, some stakeholders in the capital market say the ad-hoc committee handling the probe should approach the assignment with utmost sense of urgency, fairness, and diligence. According to them, the committee should focus on issues that led to the crisis in the market with a view to restoring investors' confidence and make the market attractive once more.
A stockbroker and Chief Responsibility Officer of Value Investing Limited, Mr. Seye Adetunmbi, noted that the Committee should focus on the real issues that affected the market negatively.
“They should focus on known infractions and how to deal with culprits with dispatch. The committee should also charge regulators to be up and doing in order to prevent excesses of operators in the future,” he said.
The Managing Director of Investment Centre Limited, Mr. Ifeanyi Odunwa, is of the opinion that the Committee should approach the assignment with utmost urgency, fairness and diligence.
“The public hearing can be adjudged to be successful if the committee focuses on the remote and immediate causes of the near collapse of the our capital market and obtain suggestions from all stakeholders and relevant professionals on how best to resuscitate it as well as moving it forward.
“The issues at stake go beyond personal and mundane matters but on the wellbeing of the national economy of which the stock exchange is the heartbeat,” Odunwa said.
However, he added that the Committee and Nigerians generally should know that foreign investors are watching the unfolding scenario, stressing that the market still needed government's intervention of some sort.
Some shareholders also spoke on the matter. For instance, the General Secretary of Independent Shareholders Association of Nigeria (ISAN), Mr. Adebayo Adeleke, urged the committee to conduct a public hearing and not a probe of operators or regulators.
“The Committee should maintain its integrity and not to be intimidated by the burden of the previous committee. The Committee should conduct a public hearing and not a probe and not defeat the purpose of engendering investors' confidence,” Adeleke said.
In his views, the President of Association for the Advancement of the Rights of Nigerian Shareholders (AARNS), Dr. Faruk Umar, said that the committee should concentrate on how the market would be revived.
“The current DG of the SEC has taken positive steps in trying to bring confidence back to the market, including a review of the Code of Corporate Governance and speedy resolution of complaints from shareholders. She has also made companies to submit their quarterly results or be suspended. If this committee wants to investigate SEC, why should it be limited to the Oteh's tenure when the market collapsed even before she was appointed? The investigation should include the tenures of her predecessors,” Umar said.
Another investor, Mr. Oderinde Taiwo of Proactive Shareholders Association, noted that the committee should focus on and identify the variables that were responsible for the crisis in the market in order to find a solution to the crisis.
Also speaking, Alhaji Gbadebo Olatokunbo, urged the committee to be sincere to the nation in their assignment. “They should be sincere to the nation for we have had more than we bargained for. We expect malice towards none but serious deliberations that should move the market forward,” he said.
For Mrs. Bisi Bakare of Pragmatic Shareholders Association of Nigeria (PSAN), the committee should conduct a thorough investigation into all scandals, allegations and counter allegations that rocked the market since 2009, including those relating to the various privatization exercises by the Federal Government and the circumstance surrounding the removal of the former Director General of the NSE.
Before the probe, the Dirctor General of SEC , Ms. Arunma Oteh, had expressed her vision to rescue the market from its steady decline and in February this year Oteh was quoted as saying: “Against the backdrop of the state of the market in 2011and taking full cognizance of the challenges that continue to weaken global economic recovery, we have in place a viable strategy to move the Nigerian capital market in the direction of sustained recovery and growth.”
She did not end there, but added that “the potential of the Nigerian capital market to galvanize the economy for growth has never been more profound. Being an enabler of socio-economic development, the market is a ready source for raising capital with which government can deliver on its social contract to the citizenry. The current challenges in the market notwithstanding, the Commission remains optimistic that the outlook of the market is favourable given the economy's fairly decent growth and the relative stability the country enjoys.”
These were the positive thoughts Oteh had about the market in particular and the country's economy in general.
However, since March 15, 2012, those thoughts had been disorganized by the bribery scandal that rocked the public hearing on the capital market by the House of Representatives Committee on Capital Market and Institutions.
The public hearing was intended to address the issues that led to the near collapse of the nation's capital market with a view to moving the market forward.
However, after a good beginning, the hearing turned sour soon after Oteh alleged that she would not be given a fear hearing because she did not offer the Committee a bribe of N39 million it had requested for. Oteh alleged that the committee had demanded N39m from SEC to fund the hearing.
“In asking the SEC to contribute N39m for this public hearing, don't you think that you are undermining your capacity to carry out your duties?” she asked the chairman, Herman Hembe.
According to her, the credibility and integrity of Hembe was questionable.
"I have a sterling and auditable career spanning two decades. I came from a multilateral organisation where I made a mark and have unquestionable integrity. With your posture of yesterday, I doubt the fairness of this committee and most importantly, the credibility of the Chairman, Hon. Hembe.
"I made a presentation on Tuesday, March 13, it was not made public to Nigerians and indeed the world, only for you to put your allegation of doubting my competence on live television yesterday, March 14, for public consumption," she declared.
The SEC boss alleged that Hembe was corrupt and lacked credibility.
“For instance, he collected Estacode and other travel allowances from SEC to travel to the Dominican Republic on a capacity enhancement conference for capital market regulators. He did not go, neither did he return the money collected. Also, he asked the commission to contribute N39 million towards the ongoing charade of a public hearing and demanded another N5 million cash on Tuesday, March 13, 2012. He made both demands by proxy.
"So I doubt it if I can have fair hearing from this committee and this fact has been more than demonstrated with the way you are handling this important issue. You got documents from the Commission through virtual theft and in flagrant disregard of the law of the land, the Freedom of Information Act. He used collaborators and co-conspirators to steal and smuggle these documents out of the Commission! In the spirit of fair hearing, he did not even write to us to confirm them. So, the credibility of the house is in doubt and this Committee is looking more and more like a kangaroo court," Oteh declared.
Oteh's outburst came after a day earlier the Committee had questioned her capacity to manage the market in view of evidence that the agency itself conducted some of its internal operations in breach of public service regulations.
The Committee also discovered that Oteh had spent N30 million on hotel accommodation in eight months, following her appointment in January 2010.
Besides, it was alleged that in one day, she spent N850,000 on food. The Committee also noted that she engaged two members of staff of Access Bank to work as special advisers in SEC. The two members of staff were reportedly paid allowances equivalent to those of a director in the Federal Civil Service.
The two officers were also said to be drawing their salaries from Access Bank till date. According to the Committee, having Access Bank's two members of staff working in SEC could compromise its ability to regulate the market effectively because the bank is a key player in the market.
Reacting to the bribery allegations, Hembe said they were “deliberately made to derail the objective of this hearing.”
He referred the allegations to the Economic and Financial Crimes Commission and the Independent Corrupt Practices and other Related Offences Commission for investigation.
“These are allegations and I invite the EFCC and the ICPC to investigate them. You should be ready to produce the evidence of the requests I made to you, but this hearing must go on,” Hembe said.
But the bribery allegations and counter allegations led to the dissolution of the Committee and an Ad-hoc committee headed by Ibrahim El-Sudi was constituted from Taraba State to continue with the hearing.
In an address to the House of Representative, Hembe said he neither demanded nor took any bribe from the SEC DG, “but rather fought hard to resist any such temptation.”
He said SEC made overtures to the committee through a memo ahead of the probe, vowing to go to court to clear his name.
However, it is a consensus among stakeholders that the face-off has affected the fortunes of the Nigerian capital market as market indicators, which were already looking northwards began to decline. On the eve of the probe, the Nigerian Stock Exchange (NSE) All-Share Index stood at 21,091.36, while the market capitalisation of equities was N6.656 trillion. But the two market indicators fell to 20,899.97 and N6.628 trillion respectively by the end of March.
Market operators said the market indicators would decline further as the probe continues because investors would be waiting to see its outcome before taking any investment decision.
“Besides, there is every tendency that Oteh would lack concentration in the administrative job and would affect some of the programmes already planned for the year to boost the market. In fact, it is an ill wind that is blowing nobody any good,” a senior broker told Business Eye.
According to him, while the Hembe-led committee might have had good intentions, he noted that the strategy they adopted was wrong.
“Instead of conducting a public hearing, what the committee started with was a probe of SEC's operations and the competency of Oteh to run the Commission. We had expected that stakeholders would be allowed to give their views on what led to the stock market crisis and the way forward. Besides, those who were in charge of the regulation of the market then that are no longer in service ought to be invited and questioned on why the market was almost collapsing during their time,” the broker said.
Perhaps, Oteh's experience is a pointer to what awaits any daring professional or expert that the operating climate at home is totally unique and challenging.
