REPS PROBE NON-FUNDING OF NATIONALISED BANKS

BY BEN AGANDE
ABUJA- Chairman, House Committee on Capital Markets and Institutions, Mr. Herman Hembe, has raised  alarm that several months after the acquisition of troubled banks, some of the investors were yet to inject funds into the banks in violation of the terms of their acquisition.

In a statement in Abuja, Hembe said the committee's investigations revealed that the regulatory bodies might have handled the 'acquisition processes in breach of laid down rules and procedures.

As a result of these compliance issues, the committee  has decided to investigate the Securities and Exchange Commission, SEC,Nigerian Stock Exchange, NSE, Transaction Advisers and the banks to verify or disclaim this belief for the benefits of  stakeholders.

He said since the inauguration of the committee, it had been inundated with petitions from stakeholders in the capital market, complaining about the flaws associated with the nationalisation, mergers and acquisition process.

He added that the committee would continue to probe to restore the confidence of the Nigerian investor in the capital market and banks.

Hembe said:  'We will continue to question the process leading to the on-going mergers and acquisitions without due regard to rules, procedures and laws governing the capital markets.

'We are equally concerned about the centralised nature of advisers within a few names which brings also issues of conflict of interest.

'We are equally worried that some of these mergers are not only lopsided in favour of acquirers but more disturbing is the fact that some of the investors are yet to inject funds into the banks being acquired long after the time limit as contained in the approved transaction documents.

'Let me remind you that morality is different from the rule of law.  A single flaw can void a transaction in law and our job as legislators is to make sure that rules and regulations are followed in detail.'

He accused SEC, NSE and the banks involved of not cooperating with the committee in its investigation, warning that relevant constitutional provisions would be invoked to ensure their compliance.

'We wrote letters to the banks in question and their financial advisers asking specific questions, supported with transaction documentation that bordered on due process in the merger and acquisition process.

'As I address you, all these banks and institutions have refused, forgotten or neglected our request for documents/information,' he added.

'Indeed, we also requested for evidence of compliance with the extant rules and regulations from the Securities and Exchange Commission and Nigerian Stock Exchange.

We gave each concerned institution/agency we wrote a time frame of seven working days within which to send these documents to us for our review in furtherance of our oversight functions.

'As I address you today, all these banks and institutions have refused, forgotten or neglected our request for documents/information.

'Let me state here the obvious fact that the constitution gives the National Assembly powers to investigate and request for documents to aid such investigation.  Further to this, the recently passed Freedom of Information Bill seeks to create room such information, such as those this committee seeks, is made easily available to any interested Nigerian.

'That ought to be the case, particularly where  as in this case, the issue borders on the wealth of the Nigerian people and the rule of law. We will continue to question the basis of the nationalization of some of the banks. The legal rationale for this action is still unclear,' he said.