LEADERSHIP
January 28, 2008

Time For Ndidi Okereke-Onyiuke To Go

Sam Nda-Isaiah

Madam Ndidi Okereke-Onyiuke. If you don't at least know the name, then you are almost certainly not a player in the blooming Nigerian capital market. But to be a real player, you must do much better than just know her name. You must curry her favour, and this is very personal. For the rookie, Professor Ndidi Okereke-Onyiuke is the director-general of the Nigerian Stock Exchange (NSE). Ndidi has been on the job for well over a decade. She has, in fact, been at the top management of the exchange for more than two decades. She is the landlady of the exchange.

Stock exchanges all over the world are catalysts for capital formation, wealth creation and dispersion and, ultimately, economic development. They move financial resources from areas of economic surplus to areas of deficit. By international standards, the Nigerian Stock Exchange is still emerging, but that too has its advantages. A lot has happened in the last five years, however, especially since the fiat of the CBN-inspired banking consolidation which has permanently altered the market. Under Ndidi's leadership, the market has grown from relative obscurity, the preserve of only a handful elite participants, to one driven by the masses of the people. Today, even plumbers and mechanics have become participants, even if marginal. And the exchange has also opened offices in several locations in the country. But most of these successes are not Ndidi's creation. They are a result of relative macro-economic stability achieved over the years, the entrepreneurial spirit of Nigerians and our status as a new emerging market.

In the last few years, Ndidi has also notoriously become a busybody, helping former President Obasanjo in the process to foul up the political space and managing to engage in serial conflicts of interest, corruption and even sharp practices that can bring down the market. She is currently before some committees of the House of Representatives to clear herself of some well-known wrongdoings. Her name crops up these days in several discussions and gossips among the Nigerian business elite of how she has abused her office, sometimes for the most egocentric reasons. Most of her actions as director-general have been self-centred and self-seeking.

In 2003, she went against the rule of decency to organise what she termed "Corporate Nigeria" to raise campaign money using shareholders’ funds in quoted companies for Obasanjo without full disclosure. She did the same thing in 2006, helping to raise funds for Obasanjo's third term project. Such shamelessness and impudence have no parallel anywhere in the world for someone occupying that office. In spite of protests from decent Nigerians, she went ahead willy-nilly. The elections were eventually massively rigged and she waited for her reward. When that did not appear to be coming as quickly as she wanted, she and a few friends floated the idea of Transcorp which, on the face of it, was a great idea. But Ndidi had other motives. Because she had raised illegal campaign money for President Obasanjo, she had unlimited access to him. She suborned him to join them in Transcorp as a promoter. She and her friends understood the nature and extent of Obasanjo's greed. Obasanjo as president became the chief promoter and she, the associate chief promoter. Both of them then abused their offices thoroughly in favour of this privately owned company, so much so that the company became pejoratively known as the Aso Rock company among Nigerians.

If this had happened in Europe, Asia or the United States, both Obasanjo and his dear Ndidi would have been cooling their feet in prison by now, and I know Obasanjo would have preferred to share the same cell with her. Obasanjo used his office as president to pass over the nation's telecommunications national carrier, NITEL, to them. This was in addition to the Abuja Hilton Hotel, the nation's only five-star hotel, and several oil blocks. Obasanjo didn't see anything wrong with that. The most telling of this impunity was that Ndidi, who sits atop the NSE, regulating its affairs and meting out sanctions if necessary, then decided to become the chairman of their Transcorp. Nigerians who thought that was an expensive joke carried too far underestimated how far the Obasanjo regime had gone at that time. And as not unexpected, Ndidi did for Transcorp what no other exchange in the world had ever done for any company. One of the best known was that Transcorp went to the market with less than one-year audited accounts as against the market rule that requires a minimum of three years. She waived all rules and requirements for listing a company. After it had been listed,and had not commenced any real business, Ndidi, Obasanjo and friends acquired their own Transcorp shares at N1 per share. She took a loan of N200 million from one of their banks at very concessionary rates - not at the kind of interest rate other people like us get - and bought the shares. She then quickly placed the shares on "technical suspension" at the exchange. This is the kind of sleight of hand that people like Ndidi often deploy to con the public at the exchange. Transcorp’s share went up to N9.70 in no time. By the time the company was ready for the initial public offer, Ndidi, Obasanjo and co sold off their shares. Ndidi, who got N200 million almost-interest-free loan, sold off at N9.70. At the end of the day, she made close to N2 billion for doing nothing, except just abusing her office. In more serious countries, she would be in handcuffs for that. But nobody could punish her at that time because the president of the country, who was supposed to be an embodiment of the laws and sanctity of the nation, even made more for himself. It would appear that, at a point, Obasanjo got dissatisfied with stealing from the government coffers alone and decided to supplement this by stealing from poor Nigerians also. After they had made a killing, Ndidi removed the "suspension" and the price is now barely N2.00 per share, leaving gullible Nigerians who invested at N6 per share thoroughly swindled.

Nigerians are disgusted. Instead of calling her the DG of the Nigerian Stock Exchange, some now snidely call her the DG of the Nigerian Stockfish Market. In several Initial Public Offerings (IPOs), Ndidi is usually settled with handsome shares through her proxies, just as Nigerian politicians bribe top police officers before elections to work in their favour, before any approval is given for listing.

Unfortunately, the Securities and Exchange Commission (SEC) that is supposed to check her excesses is weak. In fact, the former SEC DG, Dr. Suleyman Ndanusa, who really stood up to her and was doing very well, was denied a second term by Obasanjo, Ndidi's godfather, for being too efficient and independent-minded. Ndidi used her huge influence with the former president to ensure that Ndanusa didn't get his job back. And, in a paradox, the type seen only in Obasanjo's government, she was the one that literally got the current SEC DG, who is supposed to be her regulator, appointed to his position. The joke in the capital market today is that she now regulates her regulator. But without doubt, the current DG, SEC, is a man of integrity and transparency.

The council members of the NSE cannot pretend that they do not know the numerous sharp practices that have bedeviled the exchange. It is about time Yar'Adua got interested in the goings-on there. In 2003, in the United States, Richard Grasso, former chairman of the New York Stock Exchange (NYSE), was fired merely on grounds of nepotism in fixing his own compensation which was adjudged to be unreasonable. He was accused of taking huge salaries at a time the market was showing signs of weaknesses. The fact that his board approved the $150 million package was not enough, he was sacked. In sacking him, the board said: "The exchange should operate as a role model because the NYSE is where the best companies with the best practices are listed." There should be minimum acceptable standards and Grasso, the board said, flunked the corporate governance test, and there was no transparency in his dealings. Grasso was, of course, sacked by the board of the NYSE on the directive of the Securities and Exchange Commission of the United States. After Grasso was sacked, John Reed, former chairman of CITIBANK, was invited to lead the NYSE to enhance transparency. Good corporate governance is like the Chinese wall. It must withstand centuries of change.

There are many more issues against Ndidi but for market stability and integrity I'd rather not disclose them. But she must leave now. Besides everything else, her fellow third-termers, including especially Mr Festus Odimegwu, former MD of Nigerian Breweries plc who was quickly removed by the owners of the business, have left for good. Even on the basis of the scandal of Transcorp alone, the council of the NSE should move against her at once. There are several unexceptionable and competent people in the stock exchange leadership who can be trusted to move the NSE to the next critical growth path. If both SEC and the council refuse or fail to remove her for whatever reason, then the federal government must intervene in the larger interest of the nation's economy and the more than 25 million local and foreign investors who have invested all their earnings in the capital market. A simple example: Is it possible for the CBN governor to be the chairman of a bank? No. Ndidi as chairman of Transcorp and DG, NSE, is not acceptable!

Ndidi reminds Nigerians of the past they would love to forget: Obasanjo, third term, election rigging; the sacking of Fola Adeola, the CEO of Transcorp, just because he wished to contest the same Senate seat with Iyabo Obasanjo; Transcorp, nepotism, conflict of interest, etc. If she is too dumb to know that her time is up, the SEC should show her the exit door by invoking sections 25 and 26 of the Investments and Securities Act No. 45 of 1999.

E A R S H O T

President Yar'Adua's Frustration With Obasanjo

President Yar'Adua is obviously frustrated with the unceasing revelations that show that his predecessor was indeed the closest we have had to an armed robber in charge of the nation's treasury. A few weeks ago, he told Nigerians that Obasanjo stole (sorry, wasted) N1.2 trillion on power projects and yet he still needed $4 billion to complete the same projects. He almost angrily said he would not continue to throw good money after bad. But he didn't tell us what he will do with the thief who stole that kind of money. Since Ribadu who cleared Obasanjo of all corruption charges is now in Kuru, is there any hope that the new EFCC will confirm to us what we already know about the greatest thief that ever led us? If not, let the EFCC release Ibori and Igbinedion.