As the Ad-hoc Committee of the House of Representatives on the Capital Market has set an April 17, 2012 date for resumption of its public hearing, a call has been made for the probe to be comprehensive instead of selective exercise since it is meant to draw lessons from the market’s past and make recommendations for a more sustainable capital market.
The call was made by a Lagos-based market analyst, Abiodun Hakeem who said that for the public hearing to be a comprehensive exercise; there is need for past leadership of the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) to be called upon to explain their stewardship and the crisis that rocked the capital market from 2008. According to him, “it will be a selective process if the public hearing is limited only to the current leadership of the SEC and this can be interpreted in some quarters as a witch-hunt knowing full well that the current leadership of the capital market was not on the saddle when the near-collapse of the market occurred”.
The questions market operators and Nigerians are seeking answers to are: what happened to the market integrity issues that precipitated the fall? What of the issue of insider trading, wash sales, pump and dump? What about the many recorded cases of fraud and market abuses which were prevalent at the time of the market collapse? These are questions the committee members should be seeking answers to and not focus on individuals.
It will be recalled that rather than focus on the capital market and lessons that led to the market’s near collapse, the botched hearing headed by Hembe began with the committee flaunting its powers by threatening to order the arrest of the Managing Director of the Nigerian Stock Exchange, Oscar Onyema. The threat took the center-stage in the media and drowned – out the incisive presentation made by the Director General of the Securities and Exchange Commission which ought to be provided the fulcrum of and supplied a context for the public hearing for the exercise to achieve its supposed goal. On the second day of the botched hearing, the committee began a systematic attack on the current leadership of the Securities and Exchange Commission (SEC) which had been roundly hailed for bold initiatives aimed at building a healthy capital market for the country. The exercise turned into a witch hunt with phantom and unsubstantiated allegations against the team appointed by government to contain the crisis and restore investor confidence before weighty allegations of corruption forced the Hembe-led panel to resign.
The Nigerian Stock Market which has been battling for survival from the comatose state into which it slumped at the onset of the 2008/2009 melt-down plummeted again and this was traced to the mundane nature of the discourse initiated under the guise of a market – wide by the botched Hembe-led panel which eroded the essentials of public interest. It will be recalled that prior to the Hembe panel, trading at the Nigerian Stock Exchange had inched up by 0.64% on March 12, 2012. The stock market that had started a steady rise from March, 2012 has dipped again.