6th August, 2010
Capital market operators have expressed divergent opinions on the sack of council members of Nigerian Stock Exchange (NSE).
The Security and Exchange Commission (SEC), acting on the powers vested in it by the Investment and Securities Act (ISA) 2007, on Thursday sacked council members of the NSE.
It said in a statement that the action was in the best interest of the investing public.
SEC said that the affairs of the NSE would be managed by an interim administrator to be appointed, pending the selection of a new director-general for NSE.
Some capital market operators told the News Agency of Nigeria (NAN) in Lagos on Thursday that they supported the action taken by SEC.
They said that the decision was a proactive step to protect investors and sanitise the capital market.
Others said that the SEC was just using the opportunity to cover up its â€œregulatory inadequacies.â€
Alhaji Gbadebo Olatokunbo, a former publicity secretary of Nigerian Shareholders Solidarity Association, welcomed the action and compared the development on the NSE to that of â€œAli Baba and the forty thieves.â€
He advised SEC to move further to sanitise the capital market by ensuring that operators found to be culpable were sanctioned and prosecuted.
“We must conclude this with sanctioning all the offenders in order to call evil doers to order and ensure the end of the privileged criminals,â€ Olatokunbo said.
Mr. Sunny Nwosu, National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), said he was not surprised by the action of SEC in the long standing dispute at the exchange.
He said that SEC was only taking a cue from the proactive action of the Central Bank of Nigeria (CBN) on the sack of chief executive officers of the five troubled banks.
“SEC, like the other members of the nationâ€™s financial industry, has been caught by CBNâ€™s Governor Sanusi Lamido Sanusiâ€™s bug.
“Officials are now relieved of their appointments without appropriate opportunities to defend themselves,â€ Nwosu said.
The ISAN national coordinator said that the removal of the council members would not stop litigations at the courts but would help their cases.
Mr. Okechukwu Unoegbu, a former President of Chartered Institute of Bankers of Nigeria (CIBN), described SEC’s action as punitive.
He said that he could not understand the reasons that informed the commissionâ€™s resolution without investigating all the allegations.
On the implications for the capital market, Unoegbu, who is the Chief Executive Officer of Maxi Funds Securities Ltd, said it was just an administrative action that would not have serious negative effects on the market.
“Since it is an emerging market, the impact will be minimal because all the management structures and committees at the NSE are still intact.