SEC Suspends 35 Market Operators

It’s certainly not a good way to start the New Year for some capital market operators but there were early signs of improved market regulation in the interest of the investing public as the Securities and Exchange Commission (SEC) has withdrawn the registration of 35 operators.

The commission cited non-compliance by the operators to statutory requirements as regards mandatory periodic rendering of account.

The affected members include, Indemnity Finance Limited, First Atlantic Securities, Alliance Capital Management Company Limited and Apex Securities Limited amongst others.

The Nigerian Stock Exchange, the Chartered Institute of Stockbrokers, the Institute of Capital Market Registrars and the Central Securities Clearing Systems (CSCS) Limited have been directed to desist from dealing with the affected companies.

Shareholders who still have portfolios with the listed operators have also been advised to contact the CSCS Ltd to transfer their shares to any stockbroker of their choice.

Okonjo-iweala meets with SEC staff over Oteh’s resumption

The Minister of Finance, Dr. Ngozi Okonjo-Iweala on Friday, held a conciliatory meeting with staff of the Securities and Exchange Commission (SEC).

Dr Okonjo –Iweala who was received by the Acting D.G. on arrival was at the commission to appeal to the staff to accept the decision of the Federal Government to recall the SEC D.G., Ms. Arunma Oteh, back from her leave.

The workers, through their union, the Amalgamated Union of Corporate Organizations, on Wednesday demonstrated for over an hour outside the SEC premises in Abuja, against the reinstatement of Ms. Oteh.

According to them, they are not against the government’s decision to reinstate the D.G., but insisted that they would welcome Ms. Oteh back only after the House Committee clears her of the allegations against her.

The House of Representatives had on Thursday called for the immediate sack of the Ms. Oteh, insisting that her appointment was illegal.

However, the Finance Minister stressed that the Federal Government will not go back on its decision over the matter and pleaded with the staff to let peace reign.

The Board of the SEC had in June directed Ms. Oteh to proceed on compulsory leave, to enable the board probe allegations of financial misappropriation and disharmony in the apex capital market regulator.

Oteh can attend some meetings despite her suspension-Okonjo Iweala

The Minister of Finance, Dr. Ngozi Okonjo-Iweala has defended the attendance of former Director-General (DG) of the Securities and Exchange Commission (SEC) Ms Arunma Oteh, at Tuesday’s meeting of the Economic Management Team.

Briefing state house correspondents after the meeting Dr Iweala said that Ms Arunma’s suspension from office does not stop her from attending or participating in one or two meetings on the economy.

According to the Coordinating Minister of the economy, the suspended DG is yet to be indicted by the investigations and therefore can continue to contribute her ideas to meetings.

A mild drama ensued at the Presidential villa when the suspended DG attended the Economic Management Meeting presided over by President Goodluck Jonathan.

Ms Oteh was a member of the Economic Management Team by virtue of her former position as the DG SEC.

However, with her suspension, it is expected that she would cease to be a member and give way to the acting DG, Ibrahim Bello, to take over her membership.

Court of Appeal returns Dangote as President of Stock Exchange

Africa’s richest man, Alhaji Aliko Dangote, will on Tuesday return back to the office of the President of the Nigerian Stock Exchange (NSE), following last Friday’s ruling by the Court of Appeal in Lagos upholding his three appeals against cases that led to the nullification of his election as president of the exchange in March 2010.

Dangote was elected the 17th president of the NSE in August 2009 based on a unanimous acclamation by the council members immediately after the conclusion of its 48th Annual General Meeting.

However, his election was nullified by the Federal High Court in Lagos in March 2010 following the application made to the court by some shareholders of African Petroleum Plc (now Forte Oil Plc), who had sued him, Nova Finance and Securities Limited, NSE and others, over alleged manipulation of AP shares.

But the business mogul challenged the suit and filed appeals which were upheld by the Appeal Court presided over by Justice Helen Ogunwumiju last Friday.

Delivering judgement on the appeal filed against the August 4, 2009 order, the court set aside the judgement of Justice Mohamad Liman, saying a ‘status order’ is like an injunction and the conditions for granting an injunction must exist.

The court emphasised that there was no identifiable reason or urgency to warrant the order of status quo to be made.

The second ruling was on the challenge to the Justice Lambo Akanbi ruling of March 12, 2010 nullifying the election. The court relied on its earlier judgement to set aside the order on the grounds that since the status quo order allegedly breached should not have been made, there was no question of it being breached.

The third judgement was on the appeal challenging the contempt proceedings and the bench warrant issued against Dangote on July 22, 2010. The whole proceeding was also set aside as having been conducted in error on the grounds that the very order leading to the contempt proceeding was invalid.

Reacting to the judgement, Dangote in an interview stated that he was very happy with the ruling, as it had vindicated his position all along that he should not have been removed as president of the stock exchange’s council.

He said his first priority would be to continue with the reforms started by the present NSE director-general, Oscar Onyema, to improve governance and transparency, and restore confidence in the market.

“You know the Securities and Exchange Commission (SEC) had been running the NSE like it was an agency of government. But the stock exchange is a private exchange limited by guaranty.

“So, I will be meeting the SEC appointees on the council of the stock exchange on Tuesday and taking over that day,” he said.

He added that a new council for the stock exchange with him as its president would be reconstituted next week and that the slots allotted to stockbroker members on the council would be increased from four to six.

Alhaji Dangote, will now be taking over from Mallam Ballama Manu, who has been the interim president of the council since August 5, 2010 when SEC intervened in the running of exchange.

Prior to his election in 2009, Dangote was the council’s first vice-president. He joined the council in February 2008, as the chairman, Kaduna/Kano/Yola Zonal Council.


Hembe Vs EFCC: Court to rule on its jurisidiction in July

A Federal High Court in Abuja has reserved ruling in a preliminary objection filed by the former Chairman of the House of Representatives’ committee conducting a public hearing on the near collapse of the Capital Market, Herman Hembe and his deputy Ifeanyi Azubogu, challenging charges of corruption filed against them by the Economic and Financial Crimes Commission (EFCC).

The presiding judge, Justice Abubakar Sadiq Umar fixed ruling in the application for 2 July after hearing arguments of lawyers to the lawmakers.

The anti-graft agency alleged that Mr Hembe and his deputy, converted to their own use the sum of $4,095 ,about N600,000 given to them by the Securities and Exchange Commission  as travelling allowance to a conference in Dominican Republic in October last year.

The two lawmakers filed an application asking the court to decide if it had jurisdiction and if the charges against the accused persons could be sustained by the prosecution.

But counsel to the EFCC, Mr Ojeifo Obe told the court that counsel to the accused misled by the court at its last proceedings when he said that the applications filed on behalf of the accused were to be taken before they take their plea

The lawmakers counsel argued that the judge did the right thing by allowing their application opposing the trial of the accused persons.

After listening to the arguments of the two parties, Justice Abubakar Umar ruled that the court was right to allow the objection as jurisdiction is the foundation on which a case is built.

Done with the preliminary arguments, the judge asked the parties to address the court on the objections filed by the two accused persons.

Counsel to Mr Hembe asked the court to quash the charges against his client and set him free of all charges because the proof of evidence provided by the prosecution admitted that the Director –General of the Securities and Exchange Commission made the allegations to divert public attention from the capital market probe.

He argued that what his client received was estacode for a trip he undertook which does not constitute any crime or breach of public service laws.

Counsel to Mr Azubogu also argued that his client returned the money to the SEC through the clerk of the national assembly, but the commission returned the money to his client. He added that this did not constitute any crime, as he told the court that the commission did not make available a report of its investigation showing that it only acted on hearsay.

EFCC rejected the arguments of the defendants as counsel to the anti-graft agency told the court that the only application before the court was to prove that the lawmakers have a case to answer and that it will await the ruling of the court.

Justice Umar adjourned the case to July the 5th to rule on the preliminary objections of the lawmakers to the charges of corruption.

Demutualisation of NSE may begin second-quarter of 2012

The demutualisation of the Nigerian Stock Exchange (NSE), which is meant to reposition as well as ensure an efficient and competitive capital market, may begin in the second quarter of this year.

This was revealed in the report submitted by the technical committee on the demutualisation of the NSE to the Securities and Exchange Commission on Thursday.

According to the report, the adoption of a demutualised securities exchange would fast-track development as well as deepens the capital market.

The committee believes demutualisation can set up an exchange well on the path to rapid and sustained development in the context of increased globalisation of securities markets and increased competitive tensions if done in line with the current reforms in the Nigerian capital market.

They warned that in order to ensure transparency and engender confidence, the demutualisation of the NSE must be achieved within the framework prescribed by the commission.