The
decision last week to remove both the Chairman and the Director-General
of the Nigerian Stock Exchange (NSE) was long overdue. I salute the
courage and decisiveness of my good friend Arunma Oteh, the boss of the
Securities and Exchange Commission (SEC). In all truth, the situation
had become intolerable.
During the
previous week former NSE chairman, Aliko Dangote had accused his
director-general, Ndi Okereke-Onyuike of financial misappropriation to
the tune of N11 billion. Apparently, the duo had been in a long-running
battle of power and control.
Since the spring of
2008, our economy has been crippled by gross insider abuses in the NSE.
Before then, our capital markets were unarguably the most attractive in
the world.
Returns on
investment of 100% were not uncommon, with bank stocks averaging 120%
before the bubble burst. The IPOs for the Dangote Group of Companies
were among the most successful. If you had invested in Dangote Cement
at the time they went to market, you could easily have made an
incredible 800% on your principal in less than a year. Dangote Sugar
was also the toast of the investment industry. We were all drunk with
the heady wine of a bullish bubble that we believed would always defy
the laws of gravity. People made loads and loads of dosh just by making
one or two phone calls to their stockbrokers.
And then the
chickens came home to roost. It started with a few whispering campaigns
and dirty little gossips in the gilded pavilions of Mammon. People
smelt blood when one prominent stockbroker declared that only an idiot
would invest in the Nigerian capital market. Foreign investors got the
cue and made for the border.
Within weeks, some US$16 billion of portfolio investments had left our shores.
Add to this a
ruinous banking crisis which predates Lamido Sanusi, and then you get a
fatal cocktail from which our capital markets have yet to recover.
The non-initiates
on these matters would be inclined to think the whole thing was
triggered by the global financial meltdown. Truth is, our capital
market crisis was largely home-made, in fact, occurring a good six
months prior to the sub-prime crisis that imploded at Wall Street in
September 2008.
Ndi Okereke-Onyuike
should have left the headship of the NSE as far back as 2007. Nobody
disputes her qualifications or professional standing in the industry.
It was her politics and greed that had compromised her.
As one of the
champions of so-called Corporate Nigeria, a gaggle of moneybags based
largely in Lagos, she had used her position in the dominant political
party to mobilise funds. It was unprofessional and illegal to compel
investors to cough out funds for politicians against their better
judgement or long-term interests.
Okereke-Onyiuke was
also Chairman of the Transcorp Group, a chaebol whose promotion by the
powers of the land would have made Russian oligarchs green with envy.
It was a blatant conflict of interest for her to double as Chairman of
the NSE while heading Transcorp. But she was the last to see the
absurdity of it all.
And then there was
the Obama campaign fund faux pas, which the Obama people were quick to
dismiss as 419. If Ms. Okereke-Onyuike had not been as blind as a bat
she would at least have seen the handwriting on the wall and made a
dignified exit before the curtain closed in on her.
I have met the Indlovukazi (Swazi for ‘she-elephant’).
In private she is
coquettish and shy — almost girlish. She once narrated the
serendipitous path that hauled her from obscurity to the summits of the
corporate world. Tears cascaded freely down her cheeks. I wish her a
restful retirement from the tumult that was largely of her own making.
As for the former
Chairman, Aliko Dangote, it was always odd that the richest man on our
continent should also double as Chief Rabbi of our synagogue of
capitalism. Lest I am misunderstood, I do not envy him his stupendous
wealth. And this is patently not a job application, in case the vacca
foeda who attacked me on this column is reading this.
Aliko Dangote had
no business chairing an institution in which he is the biggest single
investor. Italy has fallen below the league of civilised nations
because the country was hijacked by her richest mogul, Silvio
Berlusconi.
It would be
inappropriate to comment on Dangote’s dispute with Femi Otedola of
African Petroleum because the matter is still sub-judice.
Aliko is
surprisingly very smart. He has this astonishing capacity to rattle out
dizzying figures about profit margins, ROI and financial ratios. In
private, he is charming and humble — almost school-boyish. He has the
winsome face of Denzel Washington with the frightening eyes of
Caligula. Behind his back, his rivals refer to him as ‘Chemical Ali’.
Three lessons for
the future: first, never appoint anyone to manage the stock exchange
who is either avaricious or deliberately seeks to mix business with
politics; second,
the wealthiest
investors should be barred from managing the NSE; thirdly, we need an
anti-monopolies and anti-trust regulatory body to break the back of the
dangerous cartels that plague our economy. The market economy is indeed
the material foundation of a free society. But capitalism without laws
is like playing Hamlet without the Prince.
