After 10 years at the helms of the Nigerian Stock Exchange (NSE), the last three fraught with controversy, Ndi Okereke-Onyiuke was yesterday unceremoniously removed as director general of the Exchange. Her removal was at the instance of stockbrokers who yesterday submitted a joint position to the Securities and Exchange Commission (SEC) demanding an immediate change in leadership.

In deference to the stance of the stockbrokers, SEC yesterday asked the Council of the Exchange to fire Okereke-Onyiuke promptly in public interest failing which it would take the action directly. All members of NSE’s Council, including Aliko Dangote whose election as president of the Exchange was still mired in litigation were asked to step down.

“The affairs of the Exchange are managed by an Interim Administrator appointed by the Commission pending the selection of a new Director General”, the statement signed by Arunma Oteh, director general of SEC, stated “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,” SEC said. It is the climax of the crisis that had engulfed the Exchange which had been exclusively reported by BusinessDay in the past three years starting from her infamous fund raising frolic for current US President Barack Obama which was vigorously denounced by Obama’s campaign team and Nigerians as a scam.

Her removal came after intense pressure on the leadership of SEC, who were challenged by stakeholders in the capital market, to back its rhetoric with action, as more revelations emerge about an orchestrated deception in an executive succession process and alleged financial infraction by the management of the NSE. Shocked stockbrokers had mobilized its members with a view to stop the crisis at the Exchange. Their position is that since they own the Exchange, it is now time to prevail on their members on its Council to quickly move for the dissolution of the present Council and management and push for the appointment of an administrator to take over as the director general.

After years of docility during which time its leadership abdicated its regulatory responsibilities and kowtowed to the dictates of the Stock Exchange, immediate past director general of SEC, Musa Al-Faki, was forced to resign and long term African Development Bank (AfDB) senior executive, Arunma Oteh, was appointed to replace him. She has gone on record promising to be bullish about regulating the capital market and changing SEC’s old ways.

Analysts and other stakeholders in the market now say the current crisis at the NSE offered a unique opportunity for the Oteh-led SEC to step out of all the rhetoric and act to show that it means business. It was feared from the revelations that had emerged since last week that SEC may have fallen prey to the guile of NSE management when it allowed itself to be convinced that its ordered succession plan for the Stock Exchange, initially designed to be concluded by the end of June, needed to be extended by another month. Analysts say SEC should have been more thorough in scrutinising the request and should have called up the consulting firm NSE said it hired to ascertain what was going on.

Apparently, say sources familiar with the situation, NSE management had long planned to exclude external interest in the positions advertised and internally produce the candidates from amongst its ranks, some of whom were already being groomed by the director general, Ndi Okereke-Onyiuke, to succeed her. “NSE never had the intention to obey SEC’s directive. The plan was to make SEC think they were doing the selection as directed while working internally. The only shame is that like the old SEC, the new face of SEC was not really looking. It was far away from the engine room of the process,” said one stockbroker who is also a council member. For years, the management had kept the Council ineffective following a series of maneuvering that saw the appointment of council members decided on the basis of whether the director general was happy with a member or not. The Council should ordinarily serve as the supervisory board, but it lost its teeth over time.

A stockbroker who did not want to be named told BusinessDay last night when the NSE asked SEC for extension from June 30 to July 31 for the executive selection, it was actually in the process of manipulating the exercise, specifically by adopting the old process of having the most senior officer take over as DG since it has been observed that three general managers applied for the job anyway. It is still not clear why SEC has not requested for an update on the exercise five days after the close of the extension it gave to the NSE. Instead, BusinessDay learnt that Arunma Oteh, the DG, wants to go ahead to carry out a comprehensive scrutiny of the whole saga before acting, a move analysts say is rather slow in the face of the revelation of deception on the part of NSE.

Stockbrokers are collaborating under the Association of Stockbroking Houses of Nigeria (ASHON) and the Chartered Institute of Stockbrokers (CIS) with one council member disclosing that brokers who hitherto have been very quiet on the issue are now ready to take the bull by the horn in order to save the market and their businesses.

According to a senior broker who is deeply involved in the mobilisation drive: “We think the crisis has implication for the market that is negative for now. The shock will force everyone involved to take a serious look at the stock exchange and push quickly for demutualised status, which will enhance transparency and good governance.

“The Exchange needs to rid itself of the cult personality that has dogged it in the recent past. I believe the Exchange will come out of the current crisis better and stronger when it is all over. Sometimes, it takes a crisis to draw attention to important things and this is the first of such crisis in the over 40 years history of the NSE. I think this is the time for SEC to step in and put a temporary administrator and a new Council to run things till things are normalised.”



http://www.businessdayonline.com/index.php?option=com_content&view=article&id=13391:sec-steps-into-nse-crisis-sacks-okereke-onyiuke&catid=1:latest-news&Itemid=18