Fresh succession crisis hits Nigerian Stock Exchange


MONDAY, 26 JULY 2010 01:20        


A fresh succession crisis has gripped the Nigerian Stock Exchange (NSE) after it became evident yesterday that there has been growing disaffection following the failure of Ndidi Okereke-Onyiuke, director-general, to formally tender her notice of retirement.


Trading will open today on the floor of the NSE but it will be overcast by this brewing crisis that could put the little recovery made so far by the market in jeopardy. The Council of the Exchange had, months ago, assured the Securities and Exchange Commission (SEC) that it was mounting a credible succession programme that will lead to the selection of a new Chief Executive at the end of this month, via a process anchored by Accenture.


“As at today July 25, 2010, madam (DG) has yet to turn in a formal notice of her retirement and there is considerable concern among stakeholders and in the market that the much publicized recruitment process may not produce the desired results,” a source following the matter told BusinesssDay last night.


A succession of litigations, which some say has been stoked from within, has become a shield for high-wire intrigue at the exchange which has still not been able to publish its audited accounts for 2009, and has not laid before the council, management accounts for both the first and second quarters of this year. According to the source, “it is true that the exchange is a private concern, but that has nothing to do with the exchange’s failure to publish its accounts. The true position is that the auditors are unwilling to pass the accounts.


“There is, in particular, a travel spending of about N3.5billion which has been queried and there are other issues that require speedy but fair resolution.” The exchange has had its finances impaired by a massive slow down in its revenues from trading activities, and its huge cash balance has been drawn down in the face of growing expenditures.


It is understood that the SEC is closely following the matter, but a leading broker said last night that SEC should send in forensic auditors from independent firms just like the Central Bank of Nigeria (CBN) did, instead of sending its own team members, to scrutinize the books of the exchange. BusinessDay learnt that amidst the crisis, a secret meeting of the council of the exchange has been called for 2 pm today, and some at the council are now questioning the manner in which the meeting was convened.


By virtue of the March 12, 2010 ruling by the court, those who have been called to attend the council meeting are technically no longer members of the council, a business lawyer told BusinessDay yesterday.


A very reliable source told BusinessDay that the secret meeting has been called by a council which itself, may have been invalidated by the March 12 judgment, against a swell of outstanding court cases. That ruling is itself being appealed against by Aliko Dangote, earlier elected as President. Ricky Tarfa, who is representing Dangote in a number of cases relating to the matter of his election as president, told BusinessDay last night that he has written to the management of the Exchange to draw its attention to these substantive issues relating to the case that make the convening of such a meeting illegal. “I have written to inform them that there was an order invalidating the elections of the Council and which makes it illegal.


“That the order has not been set aside. But that is now being challenged at the Court that gave the order and also being appealed against,” Tarfa said. The Exchange, after posting what was recorded as the worst performance in the world in 2008/2009, is only now beginning to see some recovery. Last week the index posted a daily growth of 213.29 points at 25,269.36 on Friday. On Tuesday it posted 24,784 points, followed by 24,963.99 points (Wednesday), and 25,056.07 points (Thursday).






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