The House of Representatives Committee on Capital Market has directed the Director General of the Nigerian stock exchange (NSE), Mr. Oscar Onyeama, to appear before the committee or face arrest.
Members of the committee took exception to the absence of the DG at the opening day of the public hearing on the NSE organized by the House of Representatives, with the mandate to examine the financial and regulatory crisis facing the market.
The chairman of the House Committee on Capital market stated that “the DG of the NSE has done us a letter saying we (the House committee) has no oversight power over the exchange. “His (Mr. Onyeama’s) refusal to attend this opening is a slide on himself” added Mr. Hembe as he ordered Mr. Onyeama to appear before the committee forthwith.
Also, expected at the probe were the Minister of Finance and the governor of the Central Bank of Nigeria (CBN), but they were also not available.
The Director General of the Securities and Exchange Commission, Ms. Arunma Oteh was however present and she addressed the panel.
Ms Oteh, in her presentation to the committee said the global financial crisis and the subsequent economic uncertainties were amongst the challenges confronting the nation’s capital market, adding that the lingering Euro-zone crisis and the global financial downturn are still affecting the capital market which has being struggling to rebound.
“Those issues are very much with us, still. It is the weakness in the global economy most signified by the unprecedented downgrade in the United States credit rating, general economic uncertainties across the world, but most important is the Euro zone debt crisis” explained the former Vice-President of Africa Development Bank.
Ms Oteh blamed poor risk management and corporate governance as other source of the challenges as further cited instances of quoted companies, without mentioning names that engineered the over-valuation of their stock price. .
“Regrettably, as you often find around the world, there was not much emphasis on risk management and corporate governance. From our own investigations at the SEC, we found that even some listed companies, engineered the over-valuation of their stocks.”
The NSE, which is the third largest exchange in Africa, during the global financial crisis of 2008 saw its market capitalization fall to N5 trillion from N14 trillion.
The Committee members did not fail to express their displeasure at the absence of the Director General of the Nigerian Stock Exchange as they all agreed that the sector has the potential to help transform the Nigerian economy.
Lawmakers from both arms of the national assembly, regulators, shareholders group and investors are partaking in the public hearing, which will continue for the next two weeks.