The former Director General of the Nigerian Stock Exchange (NSE), Professor Ndi Okereke-Onyuike has chided the management of the exchange, over move to seek the National Assembly approval for the demutualisation of the NSE.
Demutualization, is a process, where the shares is listed and traded on the Nigerian Stock Exchange, after the general public have bought the shares as other listed companies, whose shares are being traded on the exchange.
Speaking in interview published in the bulletin of the maiden awards ceremony organised by the Capital Market Correspondent Association of Nigeria (CAMCAN), the esrtwhile NSE boss, who said she conceived the idea of the demutualisation and had ensured that all requirements were met for the initiative to be implemented, before her travails and ouster as the DG from the NSE, in 2010, frowned at what she described as an illogical decision by the present management of the NSE, to seek the National Assembly approval, for the take-off of the initiative.
The former DG expressed dismay, that the management of the NSE, under Mr Oscar Onyema, would take such a step, when according to her, it was only logical for the NSE, to seek approval of the Securities and Exchange Commission (SEC), which is the apex regulatory authority of the the capital market and the Central Bank of Nigeria (CBN), before the commencement of the initiative.
Professor Onyuike said, “We started the process. The Council approved it, the stockbrokers who are members of the exchange, i.e, the stockbroking firms not the traders themselves also approved. The owners of stockbroking firms are the members of the exchange who constitutes the the shareholding. So, it was approved and all the documentation was done before i retired. That was the last assignment i wanted to finish before i voluntarily left the exchange. So the exchange is set to and ready now for the take-off, the only aspect i don’t support is the idea and which is illogical, is for management of the exchange, to go to the National Assembly in Abuja to seek permission to go public. If you want to list your company, will you go to the House of Assembly or the Senate to seek permission? No. It is a company and so all we need to do, we have done already. We notified the SEC, which is a government organ set up to over see from a distance so that they can report to the government that this is what is happening in the stock market, not to supervise the market but to oversee it so that they can report to the government. That is what SEC does all over the world, not to administer the market but to have an overseeing impact. If First Bank wants to raise money in the stock market or wants to go to the market, does it go to report to the National Assembly? No. They would only notify the Central Bank Nigeria and the CBN will look at their books whether they qualify for the listing requirements. So, before i left we had already notified the CBN. Notification is different from going to defend and answer questions why the exchange shares should be listed on its platform. If i want to list my company, what has the National Assembly got to do with it? If you want to list your company, what has National Assembly got to do with it? You can notify by letter, so your actions and intentions shouldn’t go there to be justified by the National Assembly. If FBN or Oando are going to raise money, they do not need National Assembly approval to do that”.
Advising against the idea of the NSE seeking the National Assembly for the approval of the demutualiation process, Professor Onyuike warned that against allowing politicians to take control of the stock exchange, saying such a situation does not exist and would not be allowed in any part of the world.
She said “You don’t mix politics with your capital because your capital market is your window to the world. It is considered your window to the world, an open window , transparent window, so if you have politicians in it, nobody will trust your stock market again, especially Nigerian politicians, so all they, the NSE, needed to do just like we had already done in 2000. We wrote letter notifying the SEC, it is only SEC that can ask questions because SEC represents government, not on our board but SEC is the one that government ask to oversee the market. So, once SEC has approved, what are you going to the National Assembly for”.
She wondered why the present management of the stock market contemplate the idea of seeking approval from the National Assembly, since the apex regulatory authority had given its approval to the initiative in 2008, while she was in office, stating “how will you, after SEC had approved during my tenure in 2088, go back to a government institution for notification or permission, that is not appropriate at all”.