RE: SENATOR UDO UDOMA AND THE CHAIRMANSHIP OF UACN PLC AND MEMBERSHIP OF BOARDS OF PUBLIC QUOTED COMPANIES.
Our attention has been drawn to the recent appointment of Senator Udo Udoma as the Chairman of UACN a public quoted company in Nigeria. We are also aware that he is currently the Vice Chairman of Linkage Assurance and a board member of Unilever, both public quoted companies.
As the Minister overseeing the capital market and a seasoned banker you will agree with me that section 4 (1) (a) of the ISA 2007 vests the board of the SEC with enormous powers. For ease of reference Section 4 (1) a states that:
4. (1) The board shall be responsible for the general administration of the Commission and in particular shall:
(a) Formulate general policies for the regulation and development of the capital market and the achievement and exercise of the functions of the Commission.
Hon. Minster, it is in pursuance of the fulfillment of the responsibilities of regulating and developing the market that the act in section 13 makes elaborate provisions for the functions and powers of the commission.
A cursory look at the functions and powers of the Commission under section 13 of the ISA and the contemplation of the legislature when enacting the law seems to clearly suggest that the office or the DG, any relationship that would tie them to any of company that they (SEC) regulates.
There is therefore definitely and clearly a conflict of interest situation in Senator Udo Udoma chairing the board of SEC and UACN and being on the board of public quoted companies. We are of the opinion that the elimination of room for unregulated relationships is critical to any perception of integrity or the ability of the regulator to take actions without fear or favour.
We believe it is for this reason that SEC last year queried the Director General of the Nigerian Stock Exchange on her continued chairmanship of board of Transcorp and at the same time occupying the position of Director General and Chief Executive of the Nigeria Stock Exchange.
Hon. Minister, we feel the need for you to take immediate action on this matter because of the recent recovery of the market and the need to sustain it through tackling any issue which is capable of wearing down the confidence in the market.
As you are aware our economy depends on efficient, open markets safeguarded by the rule of law and the market deserves and is yearning for an impartial SEC that safeguards the public interest. His membership of these boards is capable of undermining this.
Hon. Minister, like all stakeholders we are in agreement that there exists a lacuna and other several inconsistencies in the ISA 2007, it is for these reasons that the committee is currently working on an amendment of the act to bring it in line with realities and international best practices.
While this is being undertaken we wish to enjoin you to direct Senator Udo Udoma to either step down as the chairman of the board of SEC or resign his chairmanship and Vice Chairmanship of UACN and Linkage Assurance as well his membership of the board of Unilever or any public quoted company.
Please accept the assurances of the committee’s highest regards,
Senator Ganiyu Olanrewaju Solomon
Chairman, Senate Committee on Capital Markets