Stakeholders are worried that a likely exit of Arunma Oteh, director-general, Securities and Exchange Commission, will pull market major indicators southward
Reactions have continued to trail the temporary exit of Arunma Oteh, embattled director-general, Securities and Exchange Commission, SEC. The board of directors of the commission had sent her on compulsory leave, claiming it would enable them investigate issues arising from the recent probe of the near crash of the capital market by the House of Representatives. A statement by SEC last week read: “The board of the SEC at its 66th meeting held on June 11, 2012, has directed the director-general, Ms. Arunma Oteh, to proceed on compulsory leave to enable an independent investigation to be undertaken in respect of the Project 50 programme, which was carried out by the commission in 2011.”
The statement, signed by Edosa Aigbekan, secretary, SEC, says: “The decision of the board was arrived at after consideration of the report of its Audit and Finance Committee, which had been directed to investigate the sources and uses of funds for the Project 50 event. Among its conclusions, the committee recommended an independent audit of Project 50 and that the key actors in the management of the funds should be asked to step aside to allow an unhindered investigation.”
But some investors have expressed concern over the development. For instance, the fear of Bisi Bakare, national coordinator, Pragmatic Shareholders Association of Nigeria, is that the development would have a negative impact on trading activities on the floor of the stock exchange. For her, the compulsory leave is coming at a time the capital market has shed about N400 billion in three weeks, a slide she said may linger and cause some anxieties for the few investors left in the market. “The market is information driven and such issue may dampen investors’ confidence for a while,” she said. According to her, the fact that Oteh had led some reforms which made some investors who had left the market after the 2008 near crash to return to the market cannot alter this.
Bakare described Oteh as a reformer and one of the most daring regulator that ever piloted the affairs of the Nigerian capital market. To her, she is an efficient and focused regulator who is a goal-getter. “Her reform exercise is a living tribute to her commitment to excellence and willingness to break boundaries in creating wealth for investors that others fear to tread,” she said. According to Bakare, under the leadership of Oteh, New Gold Exchange Traded Fund, ETF, worth N988 million, was listed on the floor of the stock exchange to give investors opportunity to spread investments thereby lowering the risk of price crash by investing in a basket of stocks or commodities.
Similarly, Joseph Ibikunle, lecturer, Department of Economics, Ajayi Crowther University, Oyo State, also confirmed that the development may further erode investors’ confidence that has started to build up in the last couple of years. “This would prevent foreign investors from investing in the sector and would send wrong signals that all is not well in the industry. This will scare away foreign investors from the country. It is capable of whittling down investors’ confidence in our capital market and even the nation’s economy. It shows the whole world that those at the helm of affairs are not actually doing what is expected of them,” he said.
Other market experts agree only partly with the investors. They insist that the development is not going to have impact on the share value of stocks, not even temporarily. They argued that Oteh was only the head of the commission and not the owner of the apex regulator and so her exit would not affect the market. For instance, Bode Abiona, a stockbroker, cautioned investors not to be afraid of what the future holds for their investments. He argued that Daisy Ekineh, executive commissioner, operation, is another asset for the market. “She was there before Oteh came on board. The market indicators will not be affected because the acting boss is competent to continue the reform,” he said.
Bakare added that there may be more to the compulsory sack. She explained that it was obvious that the commissioners in the commission are not in support of her reform programme and they are not hiding it especially during the probe of the near crash. Bakare’s view may not be out of point as an industry watcher disclosed that the development was fallout of a conspiracy against Oteh by some of the directors who are said to have been in the commission for between 25 and 35 years. “Some of them have been desperate to head the commission. They are part of the problems of the market because their tenure elapsed last Friday. It is obvious that due process was not followed in all this,” the source alleged.
However, there have been some allegations that Oteh claimed she spent about N2 billion on Project 50, a programme carried out to celebrate the 50 years anniversary of SEC, contrary to investigations by the Audit and Finance Committee of the board, which put the figure at N155 million.
It is not yet clear whether the embattled Oteh would be recalled at the end of the investigation. But many stakeholders have called for a quick resolution of the issues while also urging the interim administration to pursue credibility in the commission and the market.
Additional Report by Tony Manuaka