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.

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 [email protected]

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