SEC clamps down on Nigerian Stock Exchange, sacks DG and orders President to stop acting

The Securities and Exchange Commission ( has moved in hard on the Nigerian Stock Exchange (NSE on 4 August, ordering the Director-General to leave her post and Alhaji Aliko Dangote, one of Africa’s richest men, to stop acting as NSE President. The SEC appointed the former chief executive of audit firm Deloitte in West and Central Africa, Emmanuel Ikazaboh, as interim manager.
The move comes after years of legal and other wrangling, as reported in this blog on 31 July, culminating in an order from the court to Police to force Prof Ndi Okereke-Onyuke and Dangote to come to court on 27 July to answer charges of contempt after they failed to comply with earlier court orders suspending the August 2009 election of Dangote. The SEC also ordered the NSE Council also to stop meeting.
Meanwhile local media reported that Dangote has accused Okereke-Onyuke of mismanaging the accounts of the NSE, which she has led for 10 and served for 27 years after coming from the New York Stock Exchange. Dangote is reported to have said that the exchange has been mismanaged to the tune of N9 billion ($60 million) and owes N900 million (US$6 million) to the accounts of its subsidiary, the Central Securities Clearing System.
It is a tough move by SEC Director-General Arunma Oteh, who took office at the start of 2010. She pledged tougher regulation of Nigeria’s capital markets, and may have taken the court moves as the prompt to clean up, although many had said tough action by the SEC was long overdue. Last year Central Bank Governor Lamido Sanusi swooped and sacked up to 8 bank chiefs during a $4 billion bailout to clean up corrupt and mismanaged bankers and restore confidence in the banking sector and the capital market urgently needed a clean-up.
Local press reported drama at the Lagos trading floor of the NSE on Thursday, as officials of SEC and the Economic and Financial Crimes Commission (EFCC), accompanied by armed police and plain-clothes security officer came to enforce the dismissal of Okereke-Onyuke. Calm returned on Friday but over the week the NSE All-Share Index shed 105.39 basis points (0.4%) to close the week at 25,738.79 points ( from 25,844.18 points, although company results were also mixed.
One local paper says newly appointed interim administrator Ikazaboh has outlined a 4-point towards the recovery of the NSE. Most important is to stop the slide in market confidence, also responsibility to restore the integrity of the capital market and of the administration, finance and IT. He also aims to continue the agenda of transformation and attain a world-class capital market and let a new DG emerge. Senior stockbrokers apparently rushed there on Thursday to join their dealing clerks, before a closed door meeting with Oteh and other regulators which announced Ikazaboh’s appointment.
Reuters agency says Ikazoboh had 30 years of experience in auditing, consulting and financial advisory services. The website of Akintola Williams Deloitte ( says he joined as a Senior Audit Assistant in 1975, became partner in 1982 and senior partner in 1990. The company is auditor of the NSE.
Reuters quotes Kemi Owonubi, head of research at Lagos-based investment bank and stock brokerage Vetiva Capital Management, saying: “The allegations against the former director-general had started having a negative effect on the market.. The market has been in a holding position oscillating at current levels for about a month, even when we have seen positive earnings results from key institutions … It is all about investor confidence.” It also quotes Kayode Akindele, a director at financial advisory firm Greengate Strategic Partners, as saying: “Investors want to know that the regulators have a firm grip of the market.. This strong move by the SEC to get a grip of the situation and try to resolve the leadership crisis can only improve investor confidence, especially if the proposed interim administrator organises elections in a timely manner.”

Taken from material in Reuters, and local Vanguard,This Day and Daily Independent newspapers, among others.


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