22 January 2008

Nigeria: Onyiuke - Obasanjo Made Me Transcorp Chairman

Abuja — The Director-General of the Nigerian Stock Exchange (NSE), Prof. Ndi Okereke-Onyiuke, yesterday shed light on how she became the Chairman of Transcorp, saying former president Olusegun Obasanjo compelled her to head the board of the company.

Okereke-Onyiuke also put paid to the controversy over the demand for interests on their funds by some investors who could not get any placement after Public Offers.

She said there was no law anywhere in the world compelling banks or companies to pay interest on investors' funds after a public offer has been concluded.

The NSE DG appeared before the House of Representatives Committee on Capital Market at a session, which had the Speaker, Hon. Dimeji Bankole, in attendance.

On Transcorp, Okereke-Onyiuke said Obasanjo forced her to stay on in the company after she had completed her assignment as the head of the 32-man committee that set up the company.

"When I presented the report, I said excuse me sir, everybody here is a businessman. I think I'm in the wrong meeting because I am not a business person. I earn a salary from the Stock Exchange but I stayed out of respect but the former president said 'No. You are not in the wrong meeting. I specially asked for you to come because I noticed that the way you are controlling these men whose companies are quoted on the Stock Exchange in a harmonious manner. They respect you. The same way you will be able to chair the committee that would be responsible for this company. So, you be the chairman of this company. That is why I invited you,' she said, quoting former president Obasanjo.

Before she took up the appointment, she said she got the permission of the NSE board which in turn wrote to the World Federation of Stock Exchanges in Paris who also wrote back to say there was nothing wrong in taking up the appointment.

"I got permission from my board. They also got in touch with the World Federation in Paris. But before, it would not have been possible. That is why you can have people like Oba Otudeko who is on the board of a big company like First Bank and at the same time a member of the Council of the NSE," she said.

On the poor performance of Transcorp shares, Okereke-Onyiuke said the price was going down because the shares were sold for one to one and people took advantage of that.

She also said the 49 per cent government interest in NITEL/Mtel was not helping the company to grow.

"But in the next two months you will see. In the past, for every action taken by Transcorp we had to get clearance from Federal Ministry of Finance, Finance Ministry Incorporated, BPE and the Ministry of Communications," she said.

She, however, disclosed that Transcorp was almost concluding on how NITEL should be run.

On investors' fund, Okereke-Onyiuke said "deposits for shares do not attract interests in any stock exchange in the world. You deposit money to buy shares and you wait until the shares are bought."

Okereke-Onyuike said Dangote Sugar Refinery Plc paid interests on investors fund without prompting from anywhere, explaining that if the company had refused to pay, nobody would have forced them.

The First Bank of Nigeria Plc and Dangote Group had paid 5 per cent and 7 per cent interests respectively to the investors after their IPO's.

"The law does not require them to pay interest on the funds deposited for shares. It does not exist. But a situation where the banks keep funds for seven to eight months is wrong. It is through moral persuasion that we persuade them to pay. We have no law but we can create it; the National Assembly can enact such," she said.

On the lack of interest being shown by banks on their Corporate Social Responsibility when they make huge profits at the end of their annual years, the NSE D-G said: "It is a moral situation and the attitude of Nigerians Banks is nauseating. Nigerians are the ones keeping quiet. Banks are not financing the real sector. They are supposed to render services and charge interests. It is immoral. Banks are lending more. It used to be traders from Taiwan and Korea, but now China where they manufacture rubbish. I have stood against it. But I have no backing to force it," she said.

When the committee took her up on measures towards making the Nigeria capital market more robust, Okereke-Onyiuke said NSE was introducing measures that would make the market grow and that one of them was in the area of real estate.

Okereke-Onyiuke who also spoke on the remittance of excess money to the Federal Inland Revenue Service, said: "Whatever you have as excess after taking care of your operations, is called surplus instead of profit and you pay it government through Federal Inland Revenue Service (FIRS).

"The Stock Exchange has been doing that, since 1961. But 3 years ago we began to find it difficult to upgrade our computer systems to keep up with international best practices, we now appealed to the Federal Government, the FIRS and SEC that we need to retain the surplus, because the law also states so," she said.

Okereke-Onyiuke also revealed that from the year 2009, the issuance of shares certificates to investors would be abolished in a move that will eliminate cases of delayed processing of depositors' share certificate.

She said with the current effort at "de-materialisation" and the introduction of Electronic Initial Public Offering (e-IPO) the issue of delayed share certificates would be over.

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