The Director General of SEC Ms. Arunma Oteh issued a press statement on August 5, 2010 on the crisis that erupted at the Nigerian Stock Exchange. In the state she stated that “given the critical period of transition that the Exchange is currently facing, the SEC has determined that it would be imprudent to leave the Council without a designated leader”.
Good Afternoon, Ladies and Gentlemen of the press.
The Investment and Securities Act 2007, lays the responsibility for safeguarding the interest of the investor on the Commission. The Commission has closely followed the developments in the NSE, particularly with respect to the ongoing litigation and the implementation of the succession plan of the organization. There have also been several allegations of financial impropriety and corporate governance lapses in the Nigerian Stock Exchange. We carefully deliberated on the implications and ramifications of a direct intervention in the Exchange and decided that it was in the best interests of the market to take immediate and decisive actions towards resolving these concerns.
The Commission directed that the Council Member elected as President of the Exchange in defiance of the Court order should cease acting as the President pending the outcome of the ongoing litigation. The Commission also directed that the Council members elected in defiance of the Court order cease acting as members of the Council pending the outcome of the ongoing litigation.
Given the critical period of transition that the Exchange is currently facing, the SEC has determined that it would be imprudent to leave the Council without a designated leader. Under the powers vested on the Commission by the ISA, we have appointed Mr. Ballama Manu as the Interim Head of the Council, to steer the Council and Exchange through this critical period of uncertainty on account of the pending litigation regarding the status of individuals and this crucial period of change at the helm of the Exchange.
Mr. Manu brings an incredibly array of experience and qualifications to this challenging assignment. He holds a First Class Honours Bsc Accounting degree from Ahmadu Bello University, Zaria as well as an Msc in Accounting and Finance from the renowned London School of Economics. He is currently the Chairman/CEO of Sicom Capital Services Limited. Prior to this, he served as the Executive Chairman of the Federal Inland Revenue Service. Mr. Manu served in Union Bank as the Executive Director for Information Technology & Services. He has previously held top management positions in organizations such as the Executive Director (Operations) in the Nigerian Deposit Insurance Corporation.
The Commission had previously asked the NSE to develop and implement a credible and transparent succession plan. He will immediately focus on getting the succession plan back on track to ensure the timely appointment of a new Director-General.
This morning, the former Director General of the Exchange, Professor Ndi Okereke-Onyuike, was notified that she has been removed from the position. Under the powers vested in the Commission by the ISA, the Commission appointed an Interim Administrator to manage the day to day affairs and operation of the Exchange. The Interim Administrator will fill this role until the conclusion of the recruitment and assumption of duty of the substantive DG of the NSE. By the very nature of the interim role, he will be ineligible to compete or vie for the position of the Director General of the Exchange.
For the Interim Administrator position, the Commission has appointed Mr. Emma Ikazoboh. Mr. Ikazoboh brings a wealth of experience to this position and by the very nature of his prior experience, is particularly suited to address the governance concerns and allegations of mismanagement. The wealth of knowledge and experience he brings to the post will enable him to manage the affairs of the Exchange until the assumption of the substantive Director General. The interim period will be of a limited duration and a succession plan is currently being put in place to find a new Director-General for the Exchange.
Mr. Ikazoboh holds an MBA in Financial Management from the Manchester University Business School as well as a Client Service Management degree from North Western University, Chicago, USA. He is also a Fellow of the Chartered Association of Certified Accountants. He has over 25 years of experience in Public Accounting and Financial Management and several years work experience in project management. Currently, he is the Chairman/CEO for Hedonmark Management Services Ltd., a company involved in management consulting, business process outsourcing and contract employee management. Prior to this, he served as the Chairman and CEO of Akintola Williams Deloitte for the whole of West and Central Africa.
As you may know, the NSE started a transformation Program in 2008. Key aspects of the agenda relate to ensuring that a modern and world class trading platform is developed. In addition to addressing the immediate issues related to the Exchange, Mr Ikazoboh will ensure that the transformation agenda of the Exchange is not delayed in any way during the interim period.
The SEC has a great sense of responsibility and our primary concern is the integrity of the market and the protection of the interests of investors. We firmly believe that the actions we are taking will lead to long terms improvements in the state and activities of the Exchange, thereby safeguarding the interests of the investor. These directives reinforce the integrity of our markets and demonstrate commitment to accountability, particularly given the importance of ensuring adequate oversight at all times.
The SEC will be launching an immediate and transparent investigation into the Exchange and its staff to examine the alleged corporate governance lapses and the allegations of financial irregularity and mismanagement. The allegations purport that the Exchange is insolvent and may soon face bankruptcy and it will not be able to meet its financial obligations. The SEC has been unable to determine the veracity of these allegations because the Exchange has not yet, as statutorily required, submitted its audited financial statements for the year 2009. A formal investigation will therefore serve to shed some light on the situation.
The allegations regarding the leadership and membership of the Council of the NSE are very grave and that is the reason why the SEC has decided to take this step in exercising its powers under the Investment and Securities Act and other applicable regulations. The reputation and integrity of the Exchange is of critical importance to the Commission. We therefore want all the allegations to be examined fully.
It is important that the people welcome these developments as positive changes to the status quo and in the next few days, we have a plan that will unfold that will shed some more light on some of the steps we will be taking. We implore each and every one of the stakeholders in the market to cooperate and support our efforts in moving the capital markets forward.
We hope that our actions demonstrate that when there are shortcomings, the Securities and Exchange Commission, as the apex regulator, will step in decisively to address these issues in the public interest and to protect the investors.