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Has Okereke-Onyiuke Gone to Equity with Clean Hands?
By Izam Ibo
Newsdiaryonline Sat May 21,2011
The case instituted by the immediate past Director-General of
the Nigerian Stock Exchange, NSE Prof. Ndi Okereke-Onyiuke came
up for consideration on Friday, May 20, 2011 at a Lagos High
Court. Presiding was Hon. Justice Mohammed Idris, scion of
Kutigi Village in Niger State and son of a former Chief Justice
of Nigeria, who strangely does not answer the Kutigi family
name, possibly so Nigerians do not discover how the judiciary
has been converted into a family dynasty in which positions are
handed down from fathers to sons.
His Lordship had accorded accelerated hearing to the suit and
keenly gave a ruling on a matter that was filed only six months
ago. This accelerated hearing/treatment is quite remarkable in a
judiciary reputed for elevating the insistence that the wheel of
justice grinds but slowly to a rationale for dispensing justice
at snail speed. In a kangaroo ruling rendered in a most emotion
– laden voice which bespoke of compromise, his lordship awarded
=N=500million in damages to Mrs. Okereke - Onyiuke, a fraudster
and perjurer who obtained her employment in the Nigerian Stock
Exchange, NSE with forged credentials.
She claimed to have obtained a Ph.D and worked at the New York
Stock Exchange, NYSE. Authorities at the institution where she
claimed to have gotten a Ph.D from have denied that she ever
schooled there. The NYSE has also denied that she ever worked
there; that her name is not in their records. This woman
obviously committed a national swindle and should be on trial
for fraud and perjury and at the end of the trial she should be
made to refund all remunerations she ever collected at the NSE
on the basis of her forged credentials.
A dimension of troubling discomfiture manifested when, at the
eve of his lordship’s ruling, the plaintiff embarked on a
capital market-wide promotion, sensitizing people to the
imminent but undelivered judgment and how it would vindicate
her. She was inviting bewildered Nigerians to behold her
imminent judicial triumph! Was she already privy to the judgment
and to the “reliefs” which the learned and upright judge had
awarded her?
But it must be noted that the roiling crises into which the
Nigerian capital market was plunged by the global financial
meltdown of 2008 was exacerbated by a regime of regulation which
has ossified into resistance to the multifaceted stimulus
measures which the current supervision has injected into it. The
calcified resistance is expressed in the low confidence
threshold which, local retail investors especially, have in the
market. These were Nigerians of all shades and substances who
were badly bruised by the burst of the bubble erected in the
capital market by the perfidious regulation of recent memory.
To give dimension and scope to the degree of injury visited on
the Nigerian capital market by the Okereke–Onyiuke dispensation,
whose damage has proven resistant to therapeutic remedy, let us
consider the salient attributes of a functional market and
evaluate the performance of Okereke-Onyiuke’s regulatory regime
in upholding any and each of these attributes. Of importance is
that each attribute confers fairness, equitableness and
stability on the market and thus engenders robust investor
confidence.
Rule- Making/Clarity of Rules
The rules which govern the market are intended to confer an
organizing image on participants’ behaviour. They set
standards, shape behaviour and bequeath a level playing field to
market players. They are meant to promote orderly trading,
transparency and efficiency in the market. Of significance is
that market rules are living tissue as they emerge and are
amended constantly in response to the dynamic challenges thrown
up regularly by the market. They are an inevitable by-product of
the workings of the market.
The evidence before Nigerians underscores the untold negligence
in the realm of rule making in the governance regime inspired
and led by Okereke-Onyiuke. One telling example will suffice.
The ogre of margin loan and margin lending graduated into a huge
bubble that rendered the market overcast. It was rendering the
banks insolvent and distressed by eroding their capitalization
and deposit liabilities. It was fuelling artificial pricing of
equities in the market and undermining overall credibility
threshold. Inadequate laws were a factor in the prospering of
the margin lending monstrosity. Any responsible or minimally
diligent Self
Regulating Organization, SRO (which the NSE was and still is)
had a duty to call attention to this gap with a view to inviting
collaborative energies to tackle it. What did Okereke-Onyiuke do
about margin trading?
Strengthened Self- Regulatory Organizations
For clarity sake and in context, the NSE exemplifies an SRO. It
is an autonomous regulator of a market that is auto-centric,
inner-directed and accountable to its Management and Council,the
equivalent of a supervisory board. Market players and indeed the
domestic and global publics were askance at the egomaniacal
posturing of the Okereke-Onyiuke years which reduced the NSE to
a footstool for pandering to every whim and caprice of this
deity. Rather than strengthen the NSE platform, Okereke-Onyiuke
rendered it hollow. The emerging evidence on the financial state
of the NSE points to insolvency and adverse financial health as
the legacy left behind by Okereke-Onyiuke. She has left NSE
weaker than she met it in a material sense.
On the front of brand equity, the low investor confidence in the
market expresses the poor brand image of the market among local
and international investor publics. Ask the average Nigerian to
offer an impression of the NSE and he will tell you that the
Exchange supervises a voodoo capital market in which people’s
dreams die and their fortunes are ruined. Such is the
unremitting ill-will bequeathed to the NSE by its erstwhile
Director General.
Strong Enforcement Regime-Regulatory Oversight:
This is perhaps the most defining characteristic of a healthy
capital market. Without efficient enforcement machineries, a
market will be riddled with malpractices, elicit a low threshold
of investor confidence and will perform abysmally as a mechanism
and enabler of capital raises for funding business expansion and
development projects.
The enforcement scorecard of Okereke-Onyiuke suggests that
market malpractice was fair game under her watch. In place of a
zero tolerance policy for infraction for which regulators in
other climes are reputed, the NSE seemed to prefer a policy of
maximum accommodation for deviant conduct by market players.
It was a dispensation in which market players preferred to
disobey the rules and use a small portion of the proceeds of
such violation to pay the associated penalty.
Little wonder that in place of the fair, orderly and
transparent market which a strong enforcement regime engenders,
the capital market under Okereke-Onyiuke was an unfair,
disorderly market; one in which the regulator adjudicated in
favour of the highest bidder.
Rule violation and sharp practices were rampant and investors
squirmed at the prospect of enduring commitment and
participation in a market that was reminiscent of the infamous
Hobbesian state-of-nature scenario in which life was short,
brutish and nasty. That dispensation was one in which the will
to enforce the market yielded right of way to the fruits of
graft and anticipations of such fruits by a corrupt and
insouciant governance regime.
Emphasis on Capacity Building and Investor Education
The dispensation of Okereke-Onyiuke perverted governance and
lost sight of the centrality of capacity building to sustaining
a fair and efficient market. The Nigerian Capital Markets
Institute, NCMI suffered untold neglect rather than attract the
attention and resource input
that should transform it into a vital resource centre for
manpower training and development. Across the spectrum of
Capital Market Organizations, CMOs, this contempt for
engendering a meritocracy re-echoed. The requisite and law
prescribed human capital, technological and process complements
for such organizations existed more in the breach.
Investor education was a forlorn proposition. What education
took place related to the babble of multimedia advertisement
inviting unwary and wearied members of the public to
invest in primary market offers that were no more than Ponzi
Schemes and outright fraud rings.
Corporate Governance
This is the mainstay of a stable capital market; one that
allocates resources efficiently on the basis of a meritocratic
principle. Corporate failure and morbidity is typically the
consequence of poor corporate governance which simply refers to
the degree of symmetry between the interests of various
stakeholders which constitute an organization and the equitable
distribution of corporate energy and attention to custody and
promotion of every interest. In relation to the NSE, the
stakeholders include, in no specific order of significance,
investors, staff, management and Council of the Exchange, listed
companies, capital market operators, governments, the overall
economy and society. m We have seen how all these equally
legitimate interests for whose protection and promotion the
various governance rules of the capital market were formulated,
were routinely undermined to promote the selfish interest of the
erstwhile DG NSE, which interest dilated on self enrichment and
aggrandizement. The Exchange became dysfunctional and was on a
steady descent to anarchy with a troubling schism emerging
between the Council and Management on the one hand, and a
personality rift between the then DG and an influential member
of the Council on the other. Some of the tiff even found
expression in judicial brickbat which consigned corporate
governance to a parlous even imperiled status.
The anarchic regress was accentuated by the poor transparency
that defined the Exchange’s financial management. Despite a
robust earnings profile, insolvency was setting upon the
Exchange as inexplicable delays began to characterize its
response to financial obligations and charges of insolvency
became audible in many evaluations of the NSE’s financial
health.
The poor performance of the NSE on critical parameters was not
helped by the former DG’s indiscretion and haste in inducting
the Nigerian capital market into political and ideological
partisanship roles. Capital markets all over the world are
delicate and brittle phenomena whose minders make strenuous
effort to insulate from the vicissitudes and volatilities of
politics. Local and international publics were therefore
bewildered when Okereke-Onyiuke corralled listed companies on
the Exchange into a reckless and ill- advised pro candidate
Obama advocacy complete with a levy which every company was to
pay to belong to the “movement”. Even the infamous “Obasanjo
Third Term Project” was another misguided political adventure to
which Okereke-Onyiuke invited Corporate Nigeria.
In the aftermath of her removal from the office of DG, NSE
material evidence has emerged which shows that she used forged
curriculum vitae to secure the job in the first instance.
A reputable Lagos-based daily business newspaper has made
enquiries at the New York Stock Exchange, NYSE where
Okereke-Onyuike claimed to have worked. The NYSE’s Chief Legal
Officer who managed the enquiry was certain that she never
worked there since different combinations of her name went
unrecognized by the Exchange’s computers which retain a
comprehensive list of everyone who ever worked there! The
newspaper has since published the damning discovery as a cover
page story and till date, Okereke-Onyiuke has yet to react to
the material evidence and claims published in that story! All
her lawyers did was to further advertise the extent of her
ill-gotten wealth by putting out a whole page advertorial in the
newspapers to the effect that the circumstances surrounding her
removal from office were the subject of litigations in various
courts. They conveniently forgot that the discovery of her
perjury was fresh evidence and not the subject of any court
process.
In summary, Okereke-Onyiuke is in court to contest her removal
from an office to which she was wrongly appointed in the first
place with forged, fraudulent and dubious credentials; an office
which she was not qualified to occupy. She ought to be in court
defending herself from perjury. She is not a fitting supplicant
at the temple of justice. She has approached that temple with
hands soiled by the iniquity of perjury. She ought to be
fighting the fight of her life to save what she can of all she
ever earned or made from the NSE.
Izam Ibo, a Public
Affairs Analyst who lives in Lagos sent this piece from
izamibo@yahoo.com
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