Nigeria Content Online

The capital market community is waiting
with bated breath for the announcement of a substantive director
general for the Nigerian Stock Exchange (NSE). In the last one month,
names of shortlisted candidates have been bandied, the final stage now
drawn between Bola Onadele, Yvonne Ike, and Oscar Onyema.

A recent release by the NSE signed by
the Interim Administrator, Emmanuel Ikhazobor said that it has
completed a part of the multi- stage process for the selection of Chief
Executive Officer (CEO) for the Exchange while the name of the
recommended candidate has been forwarded to the Securities and Exchange
Commission (SEC) for approval.

The statement also added that the NSE
Council has reached an advanced stage in the selection process for each
of the three executive director positions. “It is expected that this
process will be completed in January 2011. The Council is currently
awaiting approval of its choice from the SEC.” This is the first time,
in the 50 year history of the stock exchange that the emergence of a
new DG is generating so much concern. But investigations revealed that
at no time has the choice of a DG been dependent on the approval of
SEC. The Investment and Securities Act 1999, from which SEC derives its
powers however grants the commission powers to disqualify unfit
individuals from being employed anywhere in the securities industry.

New approach

The new approach is of concern to some
capital market operators. Sunny Nwosu, national coordinator of the
Independent Shareholders Association, an investor advocacy group said
forwarding the name to SEC for another round of approval amounts to
playing to the gallery. “How can they send the name to SEC when SEC was
part of the interviewing panel, selection and shortlisting of the
candidates?” Mr Nwosu said in the case of the banking industry, banks
make public the names of a new helmsman and only forward the name to
the Central Bank for approval or disapproval. “Even if the CBN does
this, the NSE is not a government place. It is a private investment.
SEC cannot say it has not been involved in the process so why all the
drama?” An indication that the interim administrator of the Stock
Exchange was acting outside any statutory guideline is evident in the
statement. Mr Ikhazobor, rather than refer to a statutory provision
that mandates it to get SEC approval, pinned it down to an agreement
reached by both parties. “The position of the Exchange to get the
approval of SEC is in accordance with previously agreed procedures,
that the apex capital market regulator should give its approval to any
candidates the Exchange intends to hire prior to their engagement by
the NSE,” the release stated.

Mr Nwosu added that the interim
administrator cannot do otherwise since he was appointed by the
commission. “SEC cannot convince us that they have not meddled with the
appointment of a new DG.” He said rather than rush into appointing a
new DG whose tenure would be bogged down by legal battles; the parties
should ensure that all legal obstacles are removed. “We are in a
democracy which means that any major decision must get judicial input.”
He said the secrecy that has surrounded the appointment of the new DG
would in no way enhance investor confidence. “It shows the exchange is
unable to take decisions. Policy summersault affects investor
confidence.” At the 49th annual general meeting of the NSE held in
Lagos on November 23, 2010, the interim president of the NSE Council,
Balama Manu, said all formalities about the appointment of a new
helmsman will be concluded by December so that the candidate resumes in
January.

Successful candidate

He however said the assumption of
office of the successful candidate will depend on how soon he can
resume. “This depends on how they will disengage from their current
employment and indicate to us when they will formally resume. If you
are occupying a senior position in an organisation, usually you give a
three months notice. But if they are in a position to disengage as
quickly as possible nothing stops them from taking over office early
January 2011,” Mr Manu had said.

A senior stockbroker who did not want
his name mentioned said the whole procedure smacks of politics and
power game over who eventually becomes the new head. “The matter is
between NSE and SEC. However, for us stockbrokers it does not really
bother us as long as our trading platforms are up and running.” The
battle for who leads the Stock Exchange started last August when SEC
sacked the erstwhile DG, Ndi Okereke-Onyiuke on grounds of “inadequate
oversight of the Exchange, ongoing litigation, allegations of financial
mismanagement, governance challenges, and the inordinate delays in the
implementation of the succession plan for the Exchange,” according to a
statement by Lanre Oloyi, SEC’s spokesperson.

However, effort to get Mr Oloyi’s response on the ongoing choice of the new DG did not yield result.</