By investadvocate

Lagos (INVESTADVOCATE)-Stakeholders in the Nigerian Capital Market (NCM) has frowned over the remaining of Ikazoboh to help run the Nigerian Stock Exchange (NSE) on the prompting of the Securities and Exchange Commission (SEC) affirming that it is illegal.

Boniface Okezie, National Coordinator, Progressive Shareholders Association of Nigeria (PSAN) has termed the action as illegal and called on SEC to hands off from the day to day running of the Nigeria’s Exchange.

“A new Chief Executive Officer (CEO) has been appointed and he should occupy his predecessor’s office where he should rightfully move in on assumption of office” he said.

According to him, Oscar Onyema, the new CEO is an experienced hand in the running of Stock Exchanges; when you consider his background and pedigree; “then why must Ikazoboh; who is a Chartered Accountant remain to put through a professional” he queried

“Onyema should have moved in on assumption of office, we understand the place is still being occupied by the Interim Administrator, Whom SEC has put as a Council Member. We are saying that Ikazoboh is just a Council Member and should not be fully in office; except on emergency cases” Okezie said.

The shareholder leader affirmed that the Council can only sit when there is an emergency meeting summoned by the CEO of the Exchange. “Ikazoboh should come to the Exchange when he is needed” he said.

“It is not Ikazoboh who should guide Onyema, there are other Seniour Management members; who can guide Onyema on the Nigerian system. When Ikazoboh was appointed Interim Administrator, he functioned alongside other staff of the Exchange. Now a new CEO has assumed office, there should be some Seniour Management members to put him through the running of the Exchange” he said.

Onyema has engaged in running the American Stock Exchange (AMEX); so running the NSE will not be difficult for him based on the experience he has gathered. Though, the Nigerian system and environment may be new to him. But some Seniour Management team may acquaint him with the Nigerian system not Ikazoboh. Who put Ikazoboh through in the first place?” Okezie queried.

“We are urging Onyema to chart a new course and interface with stakeholders in the Market. These include the shareholder Leaders, the Press and Stockbrokers. And at the end of it, report to SEC on the outcome, this will attract both foreign and local investors. SEC should hands off for Onyema to have a free hand to run the Market, and then if he fails, we will hold him responsible” the shareholder leader said.

He further advised the new CEO to assert his authority and chart a way forward for the NSE to move to the next level by also liaising with the workforce of the Exchange that he inherited; by seeking their corporation to move the Market forward.

“This is not the period of victimisation; but to bring the workforce together as a family; up to messengers and cleaners. He is experienced in a world class Market; all he needs to do is to acquaint himself with the Nigerian system; but whereby he is not given a freehand, he should resign” Okezie said.

In the same vein, a Dealing Member who spoke to investadvocate on the condition of anonymity; affirmed that the recent action by SEC to appoint people to run the Stock Exchange was an aberration, illegal and totally unacceptable by Dealing Members Community.

“Any attempt for SEC to begin to appoint people who run the Exchange that will go against the power that the Exchange has as a Self Regulatory Organisation (SRO). With the current development, what we have is like a Coup d’ etat. The Laws and Regulations that guide the Exchange are currently being flagrantly jettisoned and treated with scorn by SEC” he said.

This is coming on the heels of an unconfirmed letter purported to be written by the Association of Stock Broking Houses of Nigeria (ASHON) Wednesday April 13 2010 to the Chairman of SEC protesting its directives to the Council of the NSE to appoint SEC’s nominated candidtaes to the council without any consultation with ASHON and shareholders.

The letter titled “RE: DIRECTIVES TO THE COUNCIL OF NSE” reads thus:

 

“Your recent directives to the Council of the Nigerian Stock Exchange to appoint your nominated candidates as public interest members to the council without any consultation with shareholders/members was discussed at the emergency meeting at Market Operators Committee and our conclusion was that the directive seem to be an overreach of the powers of SEC. The section 35(1) quoted as legal basis for the directives in our opinion has nothing to do with the internal governance of the Exchange. For a new SEC that is preaching corporate governance, we do not see how the appointment of members to the Nigerian Stock Exchange Council promotes good governance, if the NSE Council lacks independence. Our position is that the interim Administration has ended with the new CEO. The attempt to perpetuate the continued stay of the Interim Administrator as deputy of the NSE is not only legal, but high handed.

 

On November 23, 2010 Stockbrokers after an election, nominated 7 of its members to represent it on Council in accordance with our rules, only three of these members were co-opted purportedly because of subsisting court cases. We have not been informed of any changes in the situation. How are the new members to be appointed by SEC exempt from this legal barrier? We view the attempt to appoint majority of the members of this council as a way to exercise proprietorial rights which SEC does not have. This is particularly interesting because the same directives talks about the expanded Council preparing the Exchange for sale of its shares to the public (demutualisation) without the involvement of the owners. Demutualisation as being proposed, using the power of the Regulator to force things through, will amount to expropriation of the Exchange and we find this completely unacceptable. The role of SEC as the apex regulator is limited to approving the guidelines prepared by members for the demutualisation exercise and nothing more.

 

Let us again reiterate that the current governing rules of the Stock Exchange have no place for non members of the Council appointing members to the Council. We will advise that this wrongheaded idea be abandoned immediately to avoid creating a crisis for a market that is trying to restore investor confidence that was essentially lost because of regulatory ineffectiveness and arbitrariness”.

Also, part of a Press Statement on April 03 2011 signed by Lanre Oloyi, Head, Media of SEC and made available to investadvocate reads thus: “the task of the interim administration is not yet completed. A lot more work will need to be done to put The Stock Exchange on a sounder footing so as to achieve the objectives for which the Securities and Exchange Commission intervened.

In order to speed up this work, the Securities and Exchange Commission has, in the public interest, and pursuant to section 35 (1) of the Investments and Securities Act (ISA) 2007, directed the Council to admit some professionals, as public interest members, to strengthen the Council and support the new management team.

All the SEC nominated members, including Messrs Ballama Manu and Emmanuel Ikazoboh, shall be on the Council pending the election of a new council and are charged with working with existing Council members to achieve the following:

(a) restructuring the Exchange to ensure good corporate governance practices;

(b) concluding the ongoing initiatives/plans regarding the trading platform and other infrastructure of the Exchange aimed at making it a world class Exchange;

(c)  guiding the new Management team over the next few months to settle; and

(d)  preparing the Exchange for its demutualization including the restructuring of the lega framework.

We expect the restructuring exercise to be quickly concluded so that elections can be conducted to establish a new Council. We are hopeful that by that time all the cases in court would have been disposed of so as to allow the Interim President to conduct elections without any legal impediment.

The Commission has also directed that a one month transition period commencing 4^th April 2011 be allowed to enable proper handover by the Interim Administrator to the new Chief Executive Officer. After the transition period Mr. Ikazoboh will continue on the Council as deputy to the Interim President” the Statement said.

Onyema holds a B.Sc Computer Engineering degree from Obafemi Awolowo University, Ile Ife, Nigeria and an MBA, Finance and Investments, Ziklin School of Business, Baruch College, New York.

Also, he was a Seniour Vice President and Chief Administrative Officer with the American Stock Exchange (AMEX), a position he retained after AMEX was acquired by New York Stock Exchange (NYSE) to form the world’s largest Stock Exchange, NYSEamex in 2008.

He is currently a Council member, Gerson Lehrman Group, Austin, Texas, and also a member of the Security Traders Association of New York and Securities Industry and Financial Markets Association (SIFMA).