DENIALS GALORE

By Yemi Kolapo and Everest Amaefule
Published: Thursday, 5 Feb 2009

The Securities and Exchange Commission has dissociated itself from the comments made by its Executive Commissioner, Legal and Compliance, Mr. Charles Udorah, on behalf of the Director-General, Mr. Musa Al-Faki, calling for a government bail-out for sick banks and firms.

SEC, on Wednesday, declared that statements made by the commissioner, who represented Al-Faki at the Forum of Accountants General of states in Abuja on Monday, did not reflect the position of the commission.

“The management of SEC wishes to state categorically that those statements do not reflect the position of the commission and, therefore, dissociates itself from those views,” it said in a statement signed by the Head, Media, Mr. Lanre Oloyi.

Udorah, who spoke for the DG, had blamed chief executives of certain banks for the crisis in the capital market, saying the time was ripe for the Federal Government to take controlling interest in banks and other companies quoted on the Nigerian Stock Exchange.

He said the take over of controlling shares in unhealthy banks, which were owed N388bn by stockbrokers, should be followed by the injection of fresh hands and the prosecution of “the chief executive officers that had been overcome by greed.”

Meanwhile, the Chartered Institute of Bankers of Nigeria has refuted allegations of misconduct leveled against the banking sector by SEC, saying that the market regulator was incompetent.

In a statement on Wednesday, the institute said, “Chances are that the SEC, under massive pressure from the investing public, has resorted to diversionary tactics to cover up its failure in regulating and managing the stock market. It is time regulators stop fighting themselves and focus on their responsibilities to the investing public.”

According to the statement, signed by the Registrar/Chief Executive, CIBN, Dr. Uju Ogubunka, “The Nigerian stock market is simply drifting rudderless and we now call on the Federal Government to quickly arrest the situation by overhauling the regulatory machineries and consequently, the level of operational efficiency and transparency. Time is running out and the price Nigerians are paying for this regulatory blindfold cannot but be imagined.”

The bankers said the industry might have paid its price for performing its financial intermediation role such of lending. They noted, however, that, weighed against the strength of the capital base of even the smallest bank in Nigeria today, the impact was minimal.

“None of the banks has been found wanting in ethical conduct as far as their stock market activities are concerned, neither has any of them been found guilty by any court of law in this regard,” it added.

Separately, the Minister of State for Finance, Mr. Remi Babalola, on Wednesday, in Abuja, said that the Federal Government was working on several options to restore confidence in the stock market just as he disputed SEC’s claims.

He said, “The truth is that it is only when we have a categorical statement from the banking regulators and from the financial institutions that we can determine the extent of debts in the banking system and that is what I will rely on.

“I cannot rely on a speech SEC gave because I don’t know the basis of that figure, but if for instance, the regulator of the banking system came out to say this is the make up for each of the banks and this is the exposure they have, then we can agree.

“It is not only in the capital market, there is significant exposure in the downstream. There are so many areas that people might have recorded significant downside. What we need to do is to quantify all these and try to see how we can take it out and give them fresh air to continue their business.”

TIGERKENN COMMENTS
Well, let us deny the fact that we were afraid of the banks and getting ready to pull our funds, let us also deny that we were shaken in our resolve to invest more money. It was good news all though. Lets forgive the market and press forward. It all never happened.