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By NBF News
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ABUJA - Erstwhile Managing Director of defunct Bank PHB, Mr Francis Atuche, has urged the House of Representatives to compel CBN to return the nationalised banks- Main Street Bank, Enterprise Bank, and Keystone Bank - to their original owners, if the country earnestly desires to re-build the confidence of investors in the nation's capital market.

At the public hearing of the House of Representatives Committee on Capital Market, Atuche explained that 'until the anxiety of investors that another wave of take-over will occur again is extinguished, these investors will not take further risks.'

According to him, property rights stand at the heart and soul of confidence building and any action that suppresses it destroys confidence, noting that the Nigerian capital market has failed to show any signs of recovery as experienced in other countries where their Central Banks carefully orchestrated crisis easing safeguards.

Atuche, who was removed from office by CBN in October 2009, noted that the true losers in the capital market, which has lost about N5 trillion in the last three years, are the economy and banks' original stakeholders, especially the retail shareholders whose holdings had been mindlessly vanquished beyond redemption.

Other measures recommended by the former bank chief to stem the slide in the capital market included enhanced access to liquidity for retail investors and the urgent need to institute property right safeguards to assure shareholders that never again will their shares be abruptly snatched from them in the most bizarre manner.

In his view, these are the sure paths to re-igniting the crucial foreign participation necessary for the take-off of the capital market, arguing that 'foreign investors will only swim after the locals have ascertained its ocean's depth.'

The former bank chief finally cautioned that 'without revamping confidence and as such recouping the staggering loss of N5 trillion in the capital market, investors will never return but will rather continue to communicate their bad experiences to whosoever cares to listen, and in the global media too, thus negating any chances of a bounce back by Nigeria.'

Takes a swipe at CBN
Atuche also took a swipe at CBN's management of the nation's financial crisis. According to him, 'rather than resuscitate confidence, the regulator's strategy viciously attacked capitalism and destroyed value and confidence beyond redemption. From an initial value of N13 trillion in 2008, the Nigerian capital market fell to N6.3 trillion in the aftermath of the crisis, after which it rallied to N9.0 trillion in June 26, 2009. Since then, despite additional listings of N2.3 trillion by Dangote Group, amongst other sizeable listings, the market is stagnated at N6.5 trillion. As such, it appears that the market may have lost at least N5 trillion.

He stressed that 'CBN not only abandoned its most urgent mandate to restore confidence in such trying times, it also sent shivers to the Nigerian capital market following frequent misguided pronouncements of the CBN Governor, Sanusi Lamido Sanusi, who largely portrayed the financial system as hopeless.'

Such reckless utterances, he reminded the House of Representatives, hit a crescendo when CBN Governor referred to the nation's stock exchange market as a casino and opined that those who placed money there, and initially saw their stock price rise, have lost their money.

'And as a testament to eroded confidence, despite the over N4 trillion so far disbursed to  recapitalise the rescued banks and also purchase bad loans of other banks, the nation's economy is still weak and banking sector beleaguered in uncertainty,' he said.