Friday’s verdict by a Federal High Court sitting in Lagos which upturned the purported removal of erstwhile Chief Executive Officer of the Nigerian Stock Exchange, Prof Ndi Okereke-Onyiuke has perhaps reinforced the need to follow due process in all things Nigerian.
In a country, where the culture of impunity holds sway, there is always the temptation to do things with little recourse to legality of such actions, especially where the balance on convenience is tilted on the side popular sentiment and opinion.
There was little or no doubt that by the time of Okereke-Onyiuke ouster by the Securities and Exchange Commission on August 5, 2010, a leadership change was long overdue at the NSE.
The NSE was certainly on the verge of collapse having being dubbed the worst performing stock market in the world by rating firms on account of the massive share price crash that signalled a market correction after the exchange was turned into a bazaar by rouge bankers and crooked stockbrokers who conspired to manipulate prices for months on end.
The former Director General of SEC. Mr. Musa Al-Faki did warn of worrisome goings on in the market but Okereke-Onyiuke, then, at the height of her power as the topmost woman in corporate Nigeria, with the ears of Mr. President, told him to shut up.
The size and scale of insider deals by banks on the market led to accusations that the NSE was in the least tacitly complicit in the sleaze the pervaded the market.
The NSE DG had also courted trouble with her ill-advised “fundraiser” for United States President Barrack Obama during his presidential campaign, an action that led to an inquiry by the Economic and Financial Crimes Commission operatives and an order to refund of the monies raised.
Her dual role as NSE DG and Chairman of Transcorp Plc, a company quoted on the Exchange had also raised a lot of dust but she held on.
So when, Aliko Dangote, then president of the NSE, who was also removed by SEC, fired his damning petition alleging mismanagement of NSE funds, SEC seized the opportunity to nail her, and sent a detachment of policemen to evict her from her office.
While SEC based its decision on the new agenda of restoring confidence and integrity to the markets, the propriety of that action, executed without the former CEO being given an opportunity to defend the allegations, is what the court has condemned in its judgment.
As Justice Idris said, “it is indeed ridiculous that SEC removed the plaintiff within 24 hours, based on bad and unverified allegations and it is not in doubt that SEC did not comply with the condition precedent in removing the plaintiff.
‘‘SEC thereby acted in breach of section 308 of Investment and Securities Act (ISA) and therefore, her removal based on the said section is a nullity.”
In awarding a huge N500m in damages, the court only reinforced a rather cliché phrase - two wrongs do not make a right.
As expected SEC has signified its intention to appeal and pointed out that the court did not refer to the allegations of fraud and misconduct levelled against Okereke-Onyiuke, but one is tempted to ask why SEC has not been able to build a strong case that might warrant the woman’s prosecution in spite of the grave allegations thrown up by the forensic audit into the NSE’s affairs commissioned by SEC.
I am certainly no fan of the ousted NSE CEO, whose otherwise brilliant career as the first woman to head the NSE was sullied towards the end by her apparent inability or unwillingness to stem the rot on the market, but we must not lose sight of the fact that her removal should have followed the terms of her appointment.
The fact that till date no successful challenge has been mounted against the Central Bank of Nigeria’s sack of seven bank chief executive officers in August 2009 on similar accusations of fraud and mismanagement of their respective companies shows that the CBN had a proper understanding of its operating manual.
One must also emphasise that the problems with adherence to due process especially when it comes to enforcement of contracts in one of the major disincentives to investments in Nigeria today and why the nation still wallows at the bottom of the World Bank’s Doing Business Index year after year.
Regardless, as the market regulator, SEC still has a lot of work to do in bringing to book those brokers and other actors that conspired to manipulate that market and took huge profits while millions of retail investors, including pensioners who had put their gratuities in the stock market were left holding worthless pieces of paper when the dust settled.
Scores have been hauled before the Investments and Securities Tribunal, but what has become of the cases?
Investors are worried that the market is yet to pick up as expected despite the release of strong results by banks which means that SEC and the newly appointed Council members of the NSE really have a lot on their plate.
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