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August 16, 2010 4202 VIEWS

August 16,2010

Address to Members of the Capital market Committee at a hearing on the Recent Developments at the Nigerian Stock Exchange on Wednesday 11th August 2010 at the National Assembly, Abuja.


1.                 Preamble

I thank the honourable members of the Capital Market Committee for the invitation to this hearing, as it affords me an opportunity to tell my story to Nigerians in the wake of unprecedented malicious disinformation about my person and The Nigerian Stock Exchange.

Unfortunately, on the basis of the co-ordinated and sustained disinformation, I have been made to suffer incalculable personal loss and The Stock Exchange has been brought to disrepute. Mass media editorials and all manner of opinions have been expressed without commentators knowing the kernel of the issues at stake.

Not even the House Committee is exempt in this regard, given that I have been invited in my personal capacity as “ex- Director General” of The Nigerian Stock Exchange to explain an issue that should ordinarily be addressed by the Council (Board) of The Exchange. Also, Alhaji Aliko Dangote has been invited to this hearing in his personal capacity when in fact he should be leading the Council of The Exchange to this hearing.

I have been addressed as former Director General when there has not been any examination of the process deployed by the authorities in managing the situation that is the subject of this proceeding.Attending this hearing is Mr. Emmanuel Ikhazobor who is described as the “Interim Administrator” of The Stock Exchange. It was reported in the media that I have been relieved of my position as Director General of The Exchange when the letter The Exchange received from the Securities and Exchange Commission (SEC) was a directive to the Council of The Exchange to effect my removal.

As at today, the Council of The Exchange is yet to meet to decide on the SEC directive. Yet, the same SEC that issued this directive has deployed the worst kind of abuse of state power in a democracy to abduct the Secretary to the Council of The Exchange and invaded the premises of The Exchange in Lagos with heavily armed state security personnel to effect my purported removal from office.

The issue of due process is especially important in the context of democratic ideals and the sacred duty of the legislature to protect and advance civil liberty.

We must not gloss over the issue of due process because what happened last week at The Nigerian Stock Exchange is a precedent that put every Nigerian at risk. As the saying goes, ask not for whom the bell tolls, for it tolls for every one of us.

2.                 The Issues

The developments alluded to by the Committee as the basis for this proceeding, I presume, are the allegations of financial mismanagement made against the Management of The Nigerian Stock Exchange by, ironically, Alhaji Aliko Dangote who until recently was the President and Chairman of Council of The Exchange, having served in the Council as First Vice-President. Also, I presume that this hearing was called in the wake of the purported changes in the leadership of The Exchange as announced by SEC.

I appreciate the gravity of these developments, which raise fundamental questions about acceptable behaviour and adherence to the Rule of Law, and the incidence of these on the operations of the capital market, which thrives within a framework of rules and regulation. It is not for nothing that stock market operators are called City Gentlemen. And in the context of the recent developments in the capital market, operators and regulators of the market must not be allowed to go away with the belief that acceptable behaviour and adherence to rules and regulation apply only to other people and are only a crutch to be leaned upon when it is convenient.

2.1             On the alleged Financial Mismanagement at The Exchange

It must be placed on record that the genesis of current disquiet in the capital market is in the public petition by Alhaji Aliko Dangote alleging financial impropriety against the Management of The Nigerian Stock Exchange. It was a public petition because the petition was simultaneously released to SEC and the media, with follow-up press statements by the petitioner.

In the context of acceptable behaviour, I invite honourable members of the Capital Market Committee to note that the Council of The Exchange is not aware of the allegations made by Alhaji Dangote, in which case his recourse to SEC and the media may be considered hasty, premature and irresponsible, considering his high office and assuming there is substance to his claims.

I wish to stress that as a member of the Council of The Nigerian Stock Exchange at the time all the accounts in question were considered and approved, Alhaji Dangote never brought any of the allegations to the attention of the Council for discussion or investigation. This is especially pertinent as his membership of the Council covered the period during which he alleged there was financial imprudence that, according to him, “has brought The Exchange to the verge of financial bankruptcy”.

Even though the Management of The Exchange has responded to SEC’s questions on Alhaji Dangote’s allegation, I believe that it would be appropriate for Alhaji Dangote to answer to questions on the accounts of The Exchange in his capacity as former President and Chairman of Council and First Vice-President. This is particularly so in the context of the role of the Board of Directors (Council) in the administration of a company and the role of the Chairman of the Board. It is the height of irony that the Chairman of Council, whose chief responsibility was to see to the efficient and effective management of the institution, has turned around to allege financial impropriety under his watch.

Also, honourable members of the Capital Market Committee are invited to note that the accounts in question were prepared by Council (of which the petitioner was a member) in accordance with the responsibilities of the Council under the Companies and Allied Matters Act; the accounts passed through audit without any qualification; the accounts have been presented to the members of The Exchange who passed it without any reservations; and the accounts have been filed with the Corporate Affairs Commission as required under the statute.

Furthermore, these same accounts have been subjected to a special audit by a team of SEC inspectors and external consultants without any indicting outcome. It is curious that SEC would rely on the unsubstantiated allegations of one man for its disruptive intervention in the management of The Nigerian Stock Exchange when its previous exhaustive investigation of the same subject-matter came up with nothing indicting on the Management of the Exchange.

Meanwhile, I wish to leave honourable members of the Committee with this insight into the expenditure profile of The Exchange in the 4-year period (from 2006 to end of 2009) during which The Nigerian Stock Exchange was alleged “to have grossed a total income of N42.2 billion with a surplus of only N5.6 billion, representing 13% growth over the 4-year period”.

In the prevailing culture of disinformation and selective perception, the public have not been told that over the same 4-year period the Nigerian Stock Exchange carried out major infrastructure upgrades and investments such as:


1.      Buy-out of 60% interest of Daily Times Plc in Naira Properties Ltd (owners of the Stock Exchange Building);

2.      Installation of two 1,500-KVA Generators for the Stock Exchange Building;

3.      Redesign and upgrade of the World-Class Head Office Trading Floor commissioned by President Umar Musa Yar’Adua, GCFR in October 2007;

4.      Design and construction of a Data Centre and Power Bank to guaranty regular and uninterrupted trading;

5.      Resumption of the development of 14-storey commercial office building in Port-Harcourt, Rivers State; the construction work has reached the 8th floor as of today;

6.      Commencement of phased refurbishment work at the Stock Exchange House, which since 1983 when it was commissioned, had not been refurbished:

a.            Installation of new lifts at the 23-storey Stock Exchange House in Lagos

b.            Refurbishment of the Central Air Conditioning System for the 23-storey Stock Exchange House in Lagos

7.      Investment road-shows that enhanced the profile of Nigeria in the international investment community; and

8.      Opening of new branch offices in Benin, Ilorin, Uyo, Onitsha, Abeokuta, Owerri and Bauchi, among others. See Appendix D for complete project details.(NB: Not available to us for publication)

It is misleading to ignore these major achievements in profiling the major cost pattern of The Exchange as “salaries, pension, travel and marketing”.

Salaries and associated pension costs increased significantly over the period because the pension scheme was back-dated by 20 years as approved by the Council of The Exchange to accommodate the retired Director-General and Deputy Director-General and other retired staff who had contributed to the building of The Exchange to the enviable height it currently occupies in the economy.

Finally, on the allegation of financial impropriety, I wish to emphasise that the Management of The Exchange never exceeded budgetary approval by Council and if there is need for any explanation on the published accounts of an organisation, the Board, led by the Chairman, has the primary duty of offering insight, working with the Chief Financial Officer of the organisation. In this instance, I was neither the Chairman of the Council nor the Chief Financial Officer of the organisation. The Committee may therefore consider inviting the entire Council of The Exchange and the Chief Financial Officer for further insight into the finances of the organisation.

2.2              On the SEC intervention in the Management of The Stock Exchange

Late in the afternoon of 28th July 2010, The Exchange received a letter from SEC requesting our response to allegations of financial mismanagement by Alhaji Dangote against the Management of The Exchange. In the same letter, the Commission demanded our response to the matter of contempt proceedings against Alhaji Dangote, the Secretary to Council, and myself, in addition to inviting me to a meeting at the Commission’s Lagos office at 9am on the next day (29th July 2010).

Not minding the short time within which The Exchange was expected to respond to the Commission’s query, Management, not having anything to hide, was able to prepare a comprehensive response to all the issues raised in the SEC’s query and the petition by Alhaji Dangote that was forwarded to The Exchange. Copies of our response are available for honourable members of the Committee (

Our response (including supporting documents) was delivered to the Commission as required in the morning of 29th July 2010. However, I was unable to go for the meeting at 9am, as I had a prior invitation from the Presidency for a meeting in Abuja. It suffices to state that in our letter forwarding the response to SEC, this information was brought to their attention and we also requested for a rescheduling of the meeting to another time or/and date.

To show commitment, soon after my meeting at the Presidency, I made repeated attempts to speak with the Director General of SEC, Ms. Arunma Otteh to further explain my inability to attend the meeting with the Commission scheduled for the morning of that day and to request for a new date and time. When I could not reach her, I spoke with the Executive Commissioner, Operations of SEC, Ms. Daisy Ekine, who confirmed receipt of our response and said she was on her way back to Abuja from Lagos. She promised to convey my explanation and request to Ms. Otteh, adding that they would be getting back to me subsequently.

I have known Ms. Otteh and Ms. Ekine for a very long time and it is regrettable that without any kind of courtesy the next thing from the Commission was the abduction of the Secretary to the Council of The Exchange, Mrs. Josephine Igbinosun, on Wednesday, 4th August 2010 by unknown persons for the sole purpose of delivering letters from SEC to her.

Note that she was forcefully taken out of the premises of The Exchange to a location in Ikoyi for this purpose. And all she came back with were photocopies of a letter by SEC purporting to direct the Council of The Exchange to effect my removal from office and another letter, which was addressed to Alhaji Dangote directing him to obey court orders on the issue of chairmanship of the Council of The Exchange. Even though Mrs. Igbinosun initially refused to accept photocopies of official letters, she was compelled by her abductors to receive same. This was around 8.30pm on August 4th, 2010.

When the letters were brought to my attention and while I contemplated the import of the content, the Commission had through its Media Officer, Mr. Lanre Oloyi, issued a Press Statement around 10.56pm to the effect that I had been removed from office.

Please note that the Council of The Exchange had no chance to meet on the directive when this action was taken.Also, on Thursday, 5th August 2010 as I prepared to go to work at The Exchange, I was informed that our premises in Lagos had been flooded by heavily armed anti-riot policemen and men of other security agencies. This was later confirmed by television and other media reports. I have stayed away from office only for reasons of security concerns, as against the legitimacy of the actions of SEC.

Honourable members of this Committee should note that in subsequent Press Briefing by the Director General of SEC on 5th August 2010, she said the Commission would now commence investigation into the allegations of financial mismanagement against the Management of The Exchange to confirm their veracity. Given the actions of SEC so far, the only possible outcome of the said investigation would be to work towards their answer to the question – that is, a justification of their unconscionable action.

Honourable members of this Committee should especially note that before the recent actions of SEC, the operations of The Exchange had not been constrained in any way.The Primary and Secondary Markets aspects of the business of The Exchange functioned as normal, without oversight problems as alleged by SEC.

Committees of the Council have been meeting and discharging their various functions and in the process ensuring the smooth running of The Exchange and its market.In particular, the Disciplinary Committee of Council has met and took disciplinary actions against Dealing Member firms, which were communicated to the Commission, through our letter dated April 30, 2010.

The Quotations Committee and the Rules Committee of Council were extremely active during this period and so indeed all was well with The Exchange and the market, as confirmed by sustained gains by performance indicators of the market since the beginning of the year. If the Finance and General Purpose Committee of the Council did not meet to consider the accounts of The Exchange for the first and second quarters of the year, it was because of the Court judgement involving Alhaji Dangote as a Member of the Committee.

As an individual and officer of The Exchange, I did not suffer any legal overhang. On the matter of contempt proceedings, we had on 27th July 2010 written to the Commission on this matter and later on the same day, our Secretary to Council, Mrs. Josephine Igbinosun, and I were discharged and acquitted on the charges of contempt of court, as we ought not to have been charged in the first instance, having committed no offence and were not mentioned in the substantive suit.

However, the contempt charge and Bench Warrant against Alhaji Dangote are still pending at the same court. Should I now suffer for one man’s intransigency in the face of the law?  

3.                 Conclusion

I wish to conclude that I have worked for the past 36 years without being accused of financial impropriety and it should therefore be inconceivable that I would be involved in fraud with only weeks to my retirement and at nearly 60 years of age.

Also, it should be noted that there was no uncertainty as to date of my disengagement from The Exchange. As recent as Saturday, 31st July 2010, the Punch Newspaper ( had published a news report based on an interview with the Head of Corporate Affairs of The Exchange, confirming that I would be going on terminal leave from September (next month). In fact, I was scheduled to submit my notice of disengagement at the meeting of Council scheduled for Friday, 6th August 2010.

So, it is inconceivable, and far from true that I had refused to retire from The Exchange and thereby was undermining the management succession programme of the organisation.

Finally, I invite this Committee to note that the attacks against my person and office by SEC were based on unsubstantiated allegations, while appealing that you consider seriously the breach of due process in the current crisis in the capital market and issue the necessary directives, as those who administer the law must be seen to act within the law at all times.

Thank you.

Professor Ndi Okereke-Onyiuke, OON


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