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By NBF News
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The probe of activities in the Nigerian capital market started with good intentions and presented enormous hope for the market, however, it later turned out to be the undoing of the market, achieving nothing but the reverse of what it intends to achieve.

The temporarily suspended public hearing by the House of Representatives Committee on Capital Market and other Institutions was designed to investigate the cause of the near collapse of the capital market with a view to restoring investors' confidence, it later degenerated to a state of accusations and counter-accusations of corruption and financial recklessness among key parties in the probe.

As it appears, the current stand off between the House of Representatives and the Securities and Exchange Commission, SEC, has dealt a huge blow to the quest to return confidence to the market.

Apparently, shareholders are major losers in the on-going imbroglio, as it appears that their quest for justice and fair hearing might never come to fruition, especially after the loss of their investment put at about N30 billion, following the nationalisation of  Afribank Nigeria Plc, Spring Bank Plc and Bank PHB Plc.

Also, stockbrokers, plagued with debts from margin transactions estimated to be about N500 billion, are also losers in the imbroglio. It was expected that the Committee would have proffered solutions to the crisis facing the stockbroking community and bring succour to the profession that is key to the growth and development of the market.

Rep. Herman Hembe & Ms. Arummah Oteh
The public hearing was constituted, primarily because of the Committee's receipt of various petitions from shareholders over the controversial sale, mergers and acquisitions of some banks and also over the actions and activities of the regulators in the capital market.

Mr. Herman Hembe, erstwhile Chairman of the Committee, in his remarks before the commencement of the hearing, said the committee has received a number of petitions from investors over a number of sharp practices in the market.

According to him, since the very day the committee was inaugurated, we have been receiving petitions from investors who bought shares from banks, but did not get the certificates; the banks got merged and the shareholders were abandoned; people who bought shares from companies but were dumped somewhere and several others in that manner; shareholders who were not taken into consideration in the process of mergers and acquisition.

He said: 'When we have those kind of people who have invested their lives, some have one share, some have thousands of shares, some have millions of shares; when you begin the process of making those people lose faith, lose money in their investment, you make it difficult for those people to come back into the market. That is why investors' confidence in Nigeria is low.'

To this end, operators have expressed disgust at the way and manner the Herman Hembe- led House Committee on Capital Market conducted the public hearing prior to the change of membership of the committee by the House of Representatives.

Most of the stockbrokers who spoke to Vanguard on the issue noted that the committee derailed from the objective of the hearing.

Reacting to the development, Mr. Emeka Mmadubuike, Chairman, Association of Stockbroking Houses of Nigeria (ASHON), said it was unfortunate that what was supposed to be a public hearing to determine the cause of the protracted lull in the market was hijacked by some personal interest and turned instead to a probe of the Securities and Exchange Commission (SEC).

He stated that loss of focus by the committee has not helped the objective, calling on the newly constituted committee to focus on the objective of the hearing and proffer solutions to the problem of the market.

He said: 'The public hearing was conducted to find out the cause of the slide in the capital market and to suggest ways out of the problem; but that did not happen. Instead, we observed what looked like probe of the SEC. We want the committee to concentrate on the objective of the hearing in order to salvage the market.'

He further stated that issues that have been unraveled in the course of the public hearing were not in the interest of the market, saying that it might endanger the market.

Also speaking, Martin Oluba, Founder/Chief Possibility Officer, ValueFronteira Limited said, 'The probe of the capital market is well deserved. As long as the probe is forced to revolve around the issues while attempts to use emotions and blackmail to divert the process is discouraged, my conviction is that the outcome will help in positively transforming the market.

'The issues that have emerged so far clearly indicate that there are serious anomalies that need to be straightened out. Allowing the probe to progress in public domain will surely do this market and the Nigerian economy much good.'

In his own view, David Adonri, Chief Executive Officer, Lambeth Trust and Investment Company Limited, said, 'The current public hearing on the Capital Market by the House of Reps is democracy in action. It must be conducted to its logical conclusion.

'The Committee needs to critically examine the past and the present so that a better future can be fashioned for the Nigerian Capital Market. Testimonies from various stakeholders can assist the National Assembly in making laws that will enhance effectiveness of the entire finance industry.

'Although the event has been marred by ill temper, intimidation, intrigues, serious criminal accusations and counter-accusations, public interest will be subverted if examination of the Capital Market is terminated prematurely.

'It is a shame that after several years of existence, Nigeria's Capital Market is yet to acquire the capacity to form the critical capital required for development of the country's heavy industrial base.

This and other major deficiencies of the Nigerian Capital Market should occupy the front burner of this public inquiry, otherwise, it may end up as an exercise in futility.'

Also speaking, Mr. Johnson Chukwu, Chief Executive Officer, Cowry Asset Management Limited, stated that the committee got distracted, advising the newly constituted committee to see how to implement measures that would address the market challenges.

'The committee lost its focus and began to concentrate on corporate governance lapses at the SEC. No doubt, if the SEC is having problem with corporate governance, it will affect confidence in the market, but that wasn't the focus of the hearing, he stated.

He noted that though issues bordering on lack of integrity have been thrown up, it would not affect activities in the market. 'The market will not panic because of it. Participants and players will not react negatively because they already know the cause of market collapse. It will not affect confidence at all. The market is insulated from issues like this,' he said.

From the foregoing, it is evident that a quick resolution of the crisis be pursued, while the newly appointed committee members make all effort to restore credibility in the public hearing; restore confidence and salvage the market from collapse.