It was another day of gross revelations at the House of Representatives ad-hoc Committee probe on the near collapse of the Capital Market, as the immediate past Director-General of the Nigerian Stock Exchange (NSE), Professor Ndidi Okereke-Onyiuke made her presentations.
According to her, the government regulators; the Central bank of Nigeria (CBN) and the Security and Exchange Commission (SEC), failed to provide any guide lines for margin loans which she said banks used to speculate on share prices.
“It was margin loans that led to the collapse of the Nigerian Stock Exchange, nothing more” she affirmed as she blamed the failure of the regulatory bodies to fulfill their responsibilities.
“Margin loans by themselves are not bad, because they help to create more liquidity in the market, globally. However, in the case of Nigeria, the banks gave out these loans indiscriminately, and in most cases insisted that such margin loans were used to purchase their own shares” she stated.
Professor Okereke-Onyiuke in her presentation, largely blamed the banks for solely being responsible for the collapse of the capital market as she accused the CBN and the SEC of failing to protect investors when margin loans were indiscriminately given out by commercial banks.
She noted that the CBN cordoned the banks establishment of several arms, such as their own registrars, which they will now use when they want to come to market for a public offer. “We opposed the banks using their own registrars whenever they come to the market for offers” she said.
She also accused the SEC, of illegally collecting money from the stock exchange and market brokers to fund its regulatory activities.
Responding to the allegations levelled against the council of the NSE on Monday by SEC’s DG, Dr Arunma Oteh, that the council spent N138 million on wrist watches and N39 million on yachts, Professor Okereke-Onyiuke, stated that it is unfair for the SEC to accuse the NSE of mismanaging its finances when the SEC was one of the beneficiaries.
CSCS and Abuja stock exchange
Other revelations made by Professor Okereke-Onyiuke during the question and answer session of the probe were that she’s now been summoned to help re-organise the failed Abuja Stock Exchange and Commodities Market.
Responding to a question from the probe panel chairman on her alleged overbearing influence on the stock market, which led to the collapse of the Abuja Stock Exchange, she stated that she was never opposed to the establishment of another stock exchange in Nigeria.”It was I and the council of the NSE, that recommended that the commodities market should be included at the Abuja exchange, because we need a commodities market in this country.”
She also revealed that now that she is in her retirement, she’s been called on to help re-build the Abuja stock exchange. “I have been approached to come and help re-strategise the Abuja Stock Exchange and I will do this for free and I assure you that the market will be up and running in six months” she said.
On the legality of the CSCS, the former DG explained that the CSCS was not illegal stating the then Minister of Justice and Attorney General of the Federation was approached by the executives of the stock market on the need to amend the law that makes share certificates the only Prima Facie evidence in any litigation.
“The AGF, affirmed that the CSCS can serve as the ‘cerficateless’ evidence for shareholders….and he promised that the law will subsequently be amended.”
The CSCS account enables every share holder to hold the shares in digital formats and numbers.
On the controversial raising of $68 million for the Obama presidential campaign in 2008, the retired NSE boss stated that she never raised funds for the American elections but that all she did was create awareness for his election as the first black man who could get to rule the United States.
She explained that she’s known the US president, Barack Obama, before his sojourn into politics. She got the entire hall laughing when she said the US President posed with a picture of her and three others when they were awarded a Congressional Caucus Award.
She further noted that the Economic and Financial crimes Commission (EFCC) had investigated into the fateful dinner and found her not culpable.
On her appointment as the chairman of Transcorp, Professor Okereke-Onyiuke stated that her appointment “was just a national assignment.”
The former DG of the NSE who was forced to resign the appointment in 2008 stated that there was no conflict of interest with her appointment as she was the serving chairman of the Nigerian Stock Exchange.
She noted that the council of the stock exchange officially endorsed her appointment on Transcorp’s board after such affirmation was sought by the president.
Professor Okereke-Onyiuke, was the inaugural chairman of the Transnational Corporation set up by former President Olusegun Obasanjo with a view of creating a Nigerian transnational company in 2005.