By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE) – There are indications that the Nigerian Stock Exchange (NSE) Tuesday issued conflicting reports over the rate of Market infractions/ Complaints on its Exchange in its 2010 Annual Report and Accounts obtained by www.investadvocateng.com.
At its 50th Annual General Meeting (AGM) held in Lagos Nigeria, in the Statement of Ballama Manu, Interim Head of Council, as contained in page 13 of the Annual Report on Complaints/Infractions, it was quoted that a total number of 449 complaints were received in 2010 compared to 249 during 2009. Of complaints received, 360 were against Dealing Member Firms; while 80 were against non-dealing members and nine (9) against inactive Houses. A total of 135 Complaints were resolved; while 231 are still being investigated pending resolution.
This is contrary to what was reported and released in the NSE’s year 2009 Annual Report & Accounts.
In year 2009 Report, the Exchange was quoted to have said in page 12 under Complaints/Infraction: “A total of 249 unresolved complaints were brought forward from 2008, mainly from inactive Dealing Member Firms. In 2009 a total of 374 complaints were received against Dealing Firms. Out of this, 268 complaints were resolved; while 106 are still being investigated pending resolution†the Report said.
Note the conflict in the Report of 2010; the NSE said “a total of 449 complaints were received in 2010 compared to 249 during 2009.
Then in the Report of 2009, the Exchange was quoted as saying that “In 2009, a total of 374 complaints were received against Dealing Member Firms instead of the earlier stated 249 it was comparing with the 449 received in 2010â€ÂÂ
Still on Market Infraction, the Exchange in its year 2010 Report said it observed that complaints of unauthorised sales and failure to remit proceeds of sales continue to persist in the Market. “This can be attributed to illiquidity suffered by the majority of Dealing Member Firms, the high loan exposure of many Dealing Member Firms and the desperate efforts of the Banks to recoup outstanding facilities†the Report said.
According to the NSE, in addition to the above, it was observed that some Dealing Member Firms do not comply with the Know-Your-Customer (KYC) requirements set forth in Article 102 of the Rules and Regulations Governing Dealing. “As a result, fraudulent sales have occurred based on instructions from persons who are not the true owners of the Securities.
