Mixed reactions trail Okereke-Onyiuke court judgment

Okereke-Onyiuke

Some market operators have expressed divergent views on the judgment of a Federal High Court in Lagos last Friday which nullified the removal of the former director general of the Nigerian Stock Exchange (NSE), Ndi Okereke-Onyiuke, by the Securities and Exchange Commission (SEC).

Justice Mohammed Idris who ruled over the case also awarded the sum of N500 million to Mrs. Okereke-Onyiuke as exemplary and aggravated damages.

The former Exchange boss had challenged her removal as the DG of the NSE by SEC and demanded N3 billion as damages.

Mrs. Okereke-Onyiuke was removed on August 5, 2010 by Arunma Oteh, the director general of the Securities and Exchange Commission, over allegations of financial impropriety. The capital market regulatory agency also removed Aliko Dangote as the president of the NSE during the period.

Her removal ushered in an interim administrator for the Exchange, Emmanuel Ikazoboh, and after eight months brought in Oscar Onyema as the new chief executive officer of the NSE.

While some operators applauded the court rulings, others believe that the judgment should be appealed as some of the investigations of the yet-to-be officially released forensic report of the NSE under Mrs. Okereke-Onyiuke revealed that her administration mismanaged funds.

Boniface Okezie, the national chairman of the Progressive Shareholders Association of Nigeria, said the court judgment has “really vindicated her (Mrs. Okereke-Onyiuke) and proven that SEC’s action was illegal.”

Mr. Okezie said the judge ruled in her favour because the Exchange’s Commission did not follow due process before taking action, adding that “she was not given any fair hearing.”

For David Amaechi, an executive member of the Shareholders Association of Nigeria, the decision of the court “is good and a proof that people’s fundamental human rights should not be violated in any given circumstances.”

“(Ms.) Oteh should have suspended her following SEC’s discovery and investigated the matter thoroughly before sacking her. But because she (Ms. Oteh) wanted to show she has power, SEC went ahead to removed her without fair hearing,” Mr. Amaechi said, adding that people’s right must always be respected.

Meanwhile, a stockbroker, who spoke under the condition of anonymity, said, “I believe SEC really understood the crisis in the market before the intervention. Today, foreign investors can now trade in our market because the system is now transparent. This court judgment must be appealed so that the true face of the market during her tenure has shown in the forensic report can be revealed to the public.”

Breach of law

Delivering his judgment last Friday, Justice Muhammed Idris held that Okereke-Onyiuke’s removal was “irrational and hasty,” adding that “SEC acted in breach of Section 308 of the Investment and Security Act and, therefore, the removal of the plaintiff based on that section is a nullity.”

The judge held that the plaintiff’s right to fair hearing was breached, adding that “it is ridiculous that SEC removed the plaintiff within 24 hours after directing the NSE to remove her.”

The judge also dismissed SEC’s objection that the court lacked jurisdiction to entertain the suit, stressing that the Federal High Court had an exclusive jurisdiction over the case.

“The plaintiff is right to have commenced the suit by way of originating summons as provided by Order 3 Rule 6 of the Federal High Court rules, thus overruling the objection of SEC on the issue,” he said.

He ruled that Mrs Okereke-Onyiuke’s removal was not in accordance with the rule of law and should not be condoned in a democratic dispensation. He, therefore, declared the removal as “illegal, unlawful, null and void.” Meanwhile SEC’s spokesperson,

Lanre Oloyi, the Exchange Commission’s spokesperson, said it would appeal the judgment, adding that the court did not consider the allegations of financial mismanagement levelled against Mrs. Okereke-Onyiuke.

“In August 2010, SEC exercised its statutory powers of intervention and took regulatory action to protect the NSE, the interest of the investing public and the Nigerian economy as a whole. The judgment read in court this morning (last Friday) questions procedural aspects of SEC’s regulatory action. SEC disagrees and intends immediately to file an appeal against the decision,” the Exchange’s Commission said in a statement on Friday.

The statement noted that “the judgment makes no comment whatsoever about the serious allegations of misconduct, fraud and breach of trust made against the former Director-General of the NSE, Mrs. Ndi Okereke-Onyiuke, and some of her erstwhile colleagues. It is also important to note that Mrs. Ndi Okereke-Onyiuke has not attempted, in any forum, and in any manner whatsoever, to answer those allegations on their merits.”

Forensic report

Some of the revelations in the yet-to-be officially released report on the investigation of the NSE under the leadership of Mrs. Okereke-Onyiuke showed that in 2008, the Exchange spent N186 million to buy Rolex watches for long serving employees.

The report, a product of investigations by KPMG, an audit firm, and Aluko Oyebode Co., a legal firm, revealed that “at the beginning of 2008, the NSE expended the sum of N45 million in purchasing 64 Rolex watches for presentation to employees who had served the NSE for 10 years.”

The report also noted that “later in the same year, Candy Floss Limited (a company owned by Yinka Idowu, former head of NSE’s corporate affairs department), was given N95 million for an additional purchase of 91 Rolex watches, and subsequently, after the award ceremony, another 10 Rolex watches at the cost of N46 million were purchased.”

Meanwhile, the investigators said they observed that the award ceremony document showed that only 73 out of the 165 Rolex watches purchased were actually presented to the awardees, meaning that 92 Rolex watches valued at N99.5 million were unaccounted for.

While the fact that Articles 52 of the NSE Employee Handbook for Management and Senior Staff, as well as Article 55 of the Employee Handbook for Junior Staff limits the value of gifts/cash that can be given to employees for the long service award, the auditors said, “We observed that the gifts awarded/presented far exceeded the value stated in these handbooks, “adding that “these Articles further stated that these awards should be presented to only members of staff, but we observed that former members of staff were also given awards.”

Author: Chief Editor

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