By KELECHI MGBOJI

When, on August 4, 2010, news broke out that the former Director General of the Nigerian Stock Exchange (NSE), Pro. Ndi Okereke-Onyiuke, has been removed the fine details of her removal, the intriguing cross-fire of enforcing her exit and the undercurrents of events leading up to the fateful day were however missing. But Daily Sun can authoritatively report that high level intrigues underscored the incident.

Security report prepared by the Exchange on the day of former DG’s removal which was obtained by Daily Sun claimed that suspected men of the State Security Service had taken away the NSE Secretary, Mrs. Josephine Igbinosun to their Ikoyi, Lagos Office for delivery of letters from the Securities and Exchange Commission (SEC).  There she was said to have signed two letters from SEC, one directed to Okereke-Onyiuke and another to Alhaji Aliko Dangote.

“The Gestapo tactic of abducting the secretary to council, a law-abiding citizen apparently for the purpose of delivering letters from SEC was strange and scary especially in these days of kidnapping activities,  causing senior management to scout around town for her”, the report stated.

It continued, “Trading on the Exchange is conducted under the authority of the President of Council of the Exchange who has delegated the authority to the DG/CEO. In the absence of the President and the DG/CEO, there has neither been any delegation of authority to open the trading nor access code to open the trading engine”.

The report signed by management further added that “The confusion has not been helped by a press statement by SEC purporting that the Commission would announce interim arrangements for the Exchange. This has also created doubts as to who is responsible for conducting trading on the Exchange”.

Such was the confusion that marked the removal of the DG who is now said to be in hiding for fear of molestation by the authorities. An impeccable source disclosed that since SEC and Economic and Financial Crimes Commission (EFCC) began moves to vacate the interim injunction restraining her arrest, the former DG has decided to seek for safety outside Lagos .

Following the allegations of corporate governance lapses and financial irregularity and mismanagement against NSE DG by the former Council president, Alhaji Aliko Dangote, the Securities and Exchange Commission (SEC) decided to remove the NSE leadership to enable it launch an immediate and transparent investigation into the Exchange and its staff.

A letter by SEC with reference number SEC/DG/08/03 and dated 4 AUG, 2010 directed the Exchange to forthwith (and before the resumption of the next trading on the Exchange) remove the DG/CEO of the NSE from office.

While noting that the directive was given in pursuance of the Commission’s powers under sections13, 35, 47, 48, 49, and 308 of Industrial and Securities Act (ISA) the letter titled “Notice of removal of the DG of the NSE” cited three major reasons why it had resorted to forceful removal of the DG.

It reads “We write to inform the NSE that the DG of the Exchange has: failed to comply with the SEC’s directive to provide satisfactory documentation in rebuttal of allegations that the Exchange has been carrying out its duties in a manner that is detrimental to the interest of its beneficiaries and creditors; failed to comply to Sec’s directive to provide adequate documentation in rebuttal of allegations that the NSE is in precarious financial situation; and failed to satisfy the SEC that the NSE continues to be subject to the effective supervisory oversight of the council, and in particular has failed to satisfactorily rebut the allegation that the Council has not held a meeting since March 12, 2010. Each of the derelictions stated above has independently necessitated intervention by Commission. As a consequence, the Commission hereby directs the NSE to forthwith (and before the resumption of the next trading on the Exchange) remove the NSE DG/CEO from such office”.

Also on the same date, another letter from SEC with reference number SEC/DG/08/05 and dated 04 Aug. 2010 , was addressed to Dangote. The letter captioned “Directive to respect court order” reads in part “The Commission has concluded that it is necessary for the protection of investors and in the interest of the public that you obey the court order and cause to parade yourself as president of NSE.

As a consequence, the Commission hereby directs that the court order should be obeyed and you cease to hold yourself out as the president of the NSE”.

Almost simultaneously, a third letter addressed to the office of the NSE DG, with a reference number SEC/DG/08/04 announced the removal of the DG. The letter titled “Your Removal From Office Of DG of NSE” and dated August 5, 2010 , was slightly different from the initial letter to the DG made reference to an earlier letter dated July 28 2010 and the DG’s response contained in a letter dated 29^th July 2010 .

“We have considered your letter under reference and note that you: failed to comply with the SEC’s directive to provide satisfactory documentation in rebuttal of allegations that the Exchange has been carrying out its duties in the that is detrimental to the interest of its beneficiaries and creditors; failed to comply to Sec’s directive to provide adequate documentation in rebuttal of allegations that the NSE is in precarious financial situation; and failed to satisfy the SEC that the NSE continues to be subject to the effective supervisory oversight of the council, and in particular has failed to satisfactorily rebut the allegation that the council has not held a meeting since March 12, 2010. Each of the derelictions stated above has independently necessitated intervention by Commission. The Commission has concluded that it is in the interest of the public that the DG be removed from the office. Your removal is with immediate effect”.

Event leading up to the correspondences was sparked off when Dangote put up appearance at the Lagos floor of the Exchange on the day of the listing of the Bayelsa State government bond. It was gathered that at the Quotations Committee of the Exchange of which Dangote was a member had met to consider the listing of the bond and it was approved.

The former president, being a member of that Committee and a personal friend of the State Governor, was in attendance and eventually accompanied the governor to the trading floor where shareholders of African Petroleum sighted him and captured his image at the event. And this was used as evidence that Dangote was still parading himself as NSE president.

By virtue of a subsisting court order, the former NSE president was not expected at any official function in connection with his position as NSE president. Court viewed presence at the event with serious concern and issued a warrant against the leadership. It was against this background that differences between the two personalities became quite pronounced.

After March 6 Federal High Court ruling removing Dangote as NSE president, Daily Sun gathered that following a requisition for a meeting by Council members, a National Council Meeting was held on April 19, with Dangote not in attendance, having been removed by court.

At the meeting the various committees of council were mandated to be holding their respective meetings at committee levels. Documents available to Daily Sun showed that subsequently, meetings were held by Rules Committee, Quotations Committee, and other committees.

Another National Council Meeting said to have held on May 10, in which Accenture was believed to make a final presentation on the issue of transformation of the Exchange, the Exchange deliberated and approved the executive management selection and appointed the consultancy firm to over-see the process. But it has to be wondered whether the meetings were of any effect since the sitting DG, Okereke-Onyiuke, was also absent, having traveled to out of the country on official engagement in Nairobi , Kenya .

However, one of the allegations against the NSE leadership was that the Council never held meeting since March 12, 2010 . But it has to be wondered why SEC could not wait for Council to act on its instruction to remove the DG. Instead it hurriedly acted without regard for NSE self-regulatory status.

But one thing is pertinent in the avoidable crisis the market has been plunged into. If SEC had effected the High Court judgement on Dangote presidency with the same speed it executed Okereke-Onyiuke removal, it would have spared the prostrate market this fresh round of crisis that seeks to crash the stock again.

Daily Sun