By NBF News

The recent shake-up in the top hierarchy of the Nigerian Stock Exchange (NSE) which saw the removal of the Director-General Prof. Ndi Okereke-Onyiuke and the suspension of business mogul and President of the Stock Exchange, Alhaji Aliko Dangote, alongside members of the council, boldly underscores the need to sanitize the nation's beleaguered capital market.

The breathtaking measure, no doubt, became necessary in order to restore investors' confidence, which is crucial to the smooth operation of the market.

However, revelations of the recent weeks and the drastic action of the capital market regulator, the Securities and Exchange Commission (SEC), point to the fact that much more needs to be done to restore the much-needed sanity to the market.

The continuing fall of the All Share Index, a barometer which gauges the mood and direction of the financial market, grimly indicates that the dwindling confidence in the market has reached feverish proportions. The low confidence level pre-dates the current crisis at the NSE, but the recent upheaval has taken it several notches higher.

Figures released recently by SEC's Director-General, Ms Arunma Oteh, showed that the valuation of the stock market has plummeted to an all time low, from N12 trillion in 2009 to a current bottom of N5.5 trillion. This is alarming for investors and the economy in general. It is in this connection that we welcome every genuine measure that can quickly sanitize the capital market. The latest glimmer of hope is the disclosure by the SEC boss that arrangements have reached advanced stage to prosecute no fewer than 260 persons suspected to be guilty of various offences, contrary to the relevant sections of the Investments and Securities Act that govern the operation of the money market.

Such offences, the SEC boss explained while briefing the House of Representatives Committee on the Capital Market, include insider dealings and share price manipulation. The implication is that some top officials of NSE may have used their privileged positions to unduly influence stock prices of some quoted companies, thereby hoodwinking the investing public and shareholders.

According to the SEC boss, the decision to prosecute the suspected offenders was reached after a thorough investigation of complaints it received from investors about unwholesome activities of some persons who were alleged to have contributed to the crisis in the NSE. As we stated in our earlier editorial, the problem was, indeed, a ticking bomb that was almost certain to explode. And it did. The situation, however, could probably have been better managed, had the regulatory body waded in much earlier. Nevertheless, it is better late than never.

As things stand, anything short of a thorough cleansing of the NSE will not do. The task before SEC is daunting. Nonetheless, it is a test of Ms Oteh's promise, when she took the mantle of leadership at SEC, to sanitize the capital market and boost investors' trust. Dynamic leadership, can-do-spirit, and clarity of purpose, are required to achieve this goal. Oteh needs to keep in focus the objective and responsibility that brought her into office.

That will entail strictly applying the rules and sanctions on those proven to have breached relevant laws guiding the operation of the capital market. There should be no sacred cows as the law is no respecter of persons. We urge that the prosecution of suspected offenders be done diligently, the present litigations instituted by aggrieved persons affected by regulatory body's action, notwithstanding.

What is paramount is the stability of the NSE. The irregularities of the recent years should not be allowed to happen again. We advise SEC to work closely with other regulators such as the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance, which is the supervisory ministry of both CBN and SEC. Investors want a capital market which is as clean as a whistle. Nothing less will do.