In an effort to allow proper investigation into the affairs of Transnational Corporation of Nigeria (Transcorp), members of the House of Representatives have revealed that the Director General of the Nigerian Stock Exchange (NSE), who also doubles as the Chairman of Transcorp, Dr. Ndi Okereke-Onyiuke, may be asked to step aside in either of the two bodies.
Members of the House Committee on Capital Market confirmed to THISDAY in Abuja yesterday that, “the National Assembly wants to conduct a proper investigation on ‘the real people behind the Transcorp, the number of shares held and the cause of lack of performance in the system,’ which explains Onyiuke-Okereke’s invitation to appear before the lawmakers in Abuja.”
They explained that the “committee will likely invite the DG of NSE and ask her to either resign as the DG of the NSE or the chairmanship of Transcorp. With her sitting as the DG and chairman it will not be proper. She is the engine room of both organisations and this points to a big problem. We feel the right thing is for her to resign so that she handles the issues very well. It is even illegal.”
The committee said the House would find out how much was expected to be realised from the private placements and public offer done by Transcorp and how much was actually realised.
They told THISDAY that they had discovered that the money might have been diverted to other areas, which was not what it set out to do in the first place.
“We have received several petitions from investors who spent so much money buying the shares of Transcorp. But they have not declared how much they made, and why they have also refused to issue share certificates to so many of the investors who bought both the private placements and the public offers when the company did it.
“Nigerians deserve to know all these facts and figures so that we can move forward. We cannot use people to get what you want. We want to know the shareholding of the investors and how they came about it,” a member who craved anonymity said.
The investigative hearing is coming up after the House said last week that it would no longer allow fresh public offers on the NSE and private placements by financial institutions pending the conclusion of an investigative hearing on the banking consolidation slated for the second week of January 2008.
Some members however told THIDAY that the Securities and Exchange Commission (SEC) should not have allowed Transcorp to go into the market to seek funds if the regulatory body was carrying out its functions effectively.
“It was wrong for SEC to have allowed Transcorp to float the public offer. It was too early in the life of the company. But the shares of Transcorp were undersubscribed when they came to the market. And it was simply a response to the market forces. Investors don’t have confidence in the company and simply shut it out from the portfolios,” said the member.
The Chairman of the Committee, Honourable Ahmed Wadada, and some other lawmakers had shortly before the House went on vacation raised a motion on the floor of the House for a thorough check on the NSE.
The motion sailed through following which the Capital Markets Committee decided to summon the chiefs of the 25 consolidated banks, the Central Bank of Nigeria (CBN), NSE and the Securities and Exchange Commission (SEC) to explain certain irregularities found after the exercise. Wadada and his members invited SEC officials thrice and even wrote to find out some issues.
After the meeting, the Committee decided that “until after the investigative hearing, all the new public offers will be put aside. The House is not satisfied with the roles of the SEC and will after the hearing find ways of strengthening the institutions.
“We have deliberated several times with the officials of SEC and we frown on them for shirking their responsibilities. They have to do their jobs and if they say that they cannot or have the power to stop these banks from carrying out all these offers, then we have to find a way of making them do it.”