The idea of the public hearing on the capital markets as explicitly stated in the resolution of the House of Representatives, to “identify the manifest causes of the markets near collapse with a view to funding lasting solution” was definitely a move in the right direction. Of course, the House is a critical stakeholder in capital market development, not the least because to be effective, regulation itself must ride on the back of legislation. Therefore, when the House intimated that it will hold a 3-weeks public inquiry, it was welcomed by all and sundry.
First and foremost, it answers to the yearnings of investors-big and small- who had been adversely impacted by the catastrophic adjustment of 2008, a period that saw the market crashing from $110 billion capitalization to just about $32.9 billion in March 2008. Secondly, many had expected that this may be our last best chance for getting things right because the market had been hijacked by certain forces who would not like to hear any hint of reform, thereby slowing down the deft efforts of the Ms. Oteh to reposition the capital market and bring about the needed sanity, confidence and integrity into the market.
Many people had expected that the public hearing would also provide the launch pad for strengthening the repositioning efforts initiated by Ms. Oteh. This precious opportunity was, alas, squandered, big time, and quite ironically, by the same Committee with the oversight responsibility over the Capital Market. Either by design or default, the entire exercise for the period it lasted left so much to be desired.
In the first place, it does not appear that the Committee was really prepared for an honest inquiry that would do the job, and do it properly. Rather than taking-off from the cogent and well-articulated presentation of Ms. Oteh, regarding the status of the market, why sustained recovery is still a challenge and the way forward, the House Committee members simply resorted to subterfuge, re-packaging allegations that have already been dealt with and found frivolous a long time ago. Secondly, it also seems that there was a deliberate effort to divert attention away from the fundamental issues and hard questions of market integrity and confidence, including issues of recovery and sustainable market growth; how to save the millions of small investors; and how to expand and deepen the frontiers of the market in line with trends in the developed and emerging markets. Thirdly, from the language and the demeanour of the Committee chairman, Hon. Hembe and some of the members, it is doubtful if they were really keen in finding the answers to how greed and corruption pushed the market into such a monumental fall. Evidently discernable was another agenda which was to damage the reputation of Ms. Oteh as DG of SEC, which was unfortunate.
It boggles the mind, for example, why a public hearing to review the performance of the capital market in these troubling economic and political times, nationally and globally, could just veer off to unrelated issues, and evidently small matters of accommodation and feeding of the DG of SEC while she was settling down for the job, and the engagement of two external staff from Access Bank. Equally puzzling is why staff of SEC could be called upon to make wild allegations on national TV against their DG on matters that are purely administrative and should ordinarily come within the purview of the Board of SEC, or other agencies like ICPC, etc.
The question is: How does a hotel or food bill of whatever amount answer the critical questions of market manipulations and unethical practices that brought down the market even before Ms. Oteh assumed office in 2009. How could that kind of conversation at whatever level resolve the crisis the Nigerian capital market has been going through since 2008 and put money in the pockets of some of us that had our fingers burnt after investing our hard-earned income in the market, which just melted away? Why should the engagement of Access Bank staff has anything to do with regulatory oversight of SEC over the capital market when indeed, it is clear that these staffs were there to assist in filling capacity gaps in areas unrelated to capital market regulation, and when everyone knows this is a common practice in most government agencies, including Federal Ministries nowadays? Why should Ms. Oteh’s qualification to head the SEC become a subject of discussion at this point when, indeed, the Senate of the Federal Republic of Nigeria had in its wisdom screened this same Ms. Oteh and found her worthy enough for the job?
Let us all face the hard facts. Ms. Oteh had since assumption of office worked so hard in her bid to reposition the Nigerian capital market and enthrone strong regulatory processes that will sanitise the market, restore confidence and integrity and rid the market of fraudulent elements. She had put in place a credible framework to address in a systematic manner market integrity issues that precipitated the fall in the first place. She has been battling insider trading, wash sales, pump and dump, as well as other fraud and market abuses, almost all alone. She achieved these silently but diligently while also drawing international attention to the Nigerian capital market.
Currently about 160 market players are being tried for insider related fraud at the Investment and Securities Tribunal (IST) and for a variety of capital market offences. In addition, powerful and well-connected capital market mandarins have been sanctioned and in some cases removed for sundry infractions. This is unprecedented in the history of the Nigerian capital market and even at global comparative level. As a result, confidence is steadily returning to the Nigerian capital market and for all good measure SEC and Ms. Oteh had done their part. However, as every literate analyst must know, there is a limit to what SEC or Ms. Oteh can do under the circumstances. For the market to rebound it would require a constellation of several variables: political, economic, social and even cultural, all moving in a positive trajectory to get the market bouncing again. Many of these are outside the remit of SEC.
These are issues that should have been the subject of a public hearing; these are questions that should be brought to table for discussion, in terms of how to strengthen and sustain SEC’s efforts, while also getting critical stakeholders and market players and other financial sector regulators to their part. It must be a collective endeavour that will serve to galvanize the market. In the light of this, we must bear in mind that no answer to the current travails of the market could be found in the current attempt to play to the gallery, or to reduce the whole question of capital market recovery to those bribery allegations between Hon. Hembe and Ms Oteh.
Now Hembe, almost belatedly and incoherently had alleged that Ms. Oteh wanted to bribe him with N30 million. This perhaps was intentionally meant to orchestrate another diversion from the real issues of how House Committees extort agencies of government and perhaps provide some so-called activists with ammunition for grand standing on issues that they have little or no knowledge, to use the so-called allegation to advocate for the stepping aside of Ms. Oteh on account. It seems to me that this is a most ingenious way to further the agenda of those with the grand plan to scuttle the crystallization of a strong regulatory body that emphasises corporate governance and integrity, which Ms. Oteh presently epitomises. Ms. Oteh can be accused of anything, but certainly not corruption or compromise of regulatory integrity.
As the ad-hoc Committee begins its work it is crucial that it sticks to its mandate of: identifying the manifest causes of the markets near collapse with a view to funding lasting solution. It should avoid the unproductive approach of personalising issues and concentrate on what will be beneficial to the Nigerian capital market and the SEC, as a regulatory agency of government. We need a highly elevated discourse this time around that will provide insights and shed light on the critical issues affecting the market. And for now, let Ms. Oteh, be.
Yakubu Aliyu is former editor, New Nigerian
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