The former NSE boss reacts to allegations that her actions led to the crash

Ndidi Okereke-Onyuike, the former Director General of the Nigerian Stock Exchange (NSE), on Tuesday, dismissed allegations that abuses at the exchange while she was in charge led to the near collapse of the market.

The former NSE boss appeared before the House of Representatives adhoc committee investigating the near collapse of the capital market, a day after the Security and Exchange Commission (SEC), alleged that her tenure at the exchange, between 2000 and 2010, was responsible for the plunge of the market.

The SEC Director General, Arunma Oteh, had told the lawmakers how monitoring of the exchange was at its ebb under Okereke-Onyuike, and how investors’ funds were misused while banks and other groups perpetrated several abuses.

In instances presented to the lawmakers, cases that were cited as the reasons for Okereke-Onyuike’s sack in 2010, Oteh said the NSE bought a yacht for N37 million and wrote down the value within one year by recognising it in the books as a gift presented during its 2008 Long Service Award (LSA), yet there are no records of the beneficiary.

Oteh also claimed that NSE spent N186 million on 165 Rolex wrist watches as gifts for awardees, out of which only 73 were actually presented to the awardees. The outstanding 92 watches, valued at N99.5 million, remain unaccounted for.  

However, at her appearance on Tuesday, Okereke-Onyuike denied any wrongdoing, and said dismal oversight by the Central Bank of Nigeria (CBN) and the SEC, rather, allowed many banks to abuse marginal loans, and pushed the capital market to a crash.

She said the NSE was a privately owned company, and not a government-run organisation, and as such could make spending as it deems fit, not to be dictated to by government agency.

“What business does a government regulator have with how private company gives bonuses to its staff?” she asked. “If a stock exchange decides to buy private jet for its council members, what is wrong with that? Is it not their money?”

She said SEC had spent its energy wrongly checking the NSE’s expenses rather than regulating how the market operated.

Under the lax environment where rules were bent, and at times played roles in doing so, many banks abused margin loans without drawing the wrath of the two agencies, she said. That was the major force behind the failure of the market, she told lawmakers.

“It was really the margin loans that destroyed the market, nothing more,” she said. “CBN and SEC failed to issue guidelines for margin loans. They did not say anything when the banks were announcing that their shares were over bided by 100%, 200%, and 300%.”

The former NSE boss also criticised “grave and wild” pronouncements by the CBN, such as one made by the governor, Sanusi Lamido, referring to the stock exchange as a gambling joint. Okereke-Onyuike said that had helped diminish investors’ confidence, and was the part of the final impact that almost destroyed the market.

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