Tashikalmah Hallah
24 February 2008
interview
The House of Representatives Standing Committee on Capital Market is probing the alleged manipulations in the stock sector. What is the problem with the market? How would investors' funds be safeguarded? Ahmed Wadada, the committee's chairman, answers these and other questions in this interview
What do you make of the allegations by SEC that there is share price manipulation in the stock market?
All the things that are manifesting today, all the ills that are manifesting today in the Nigerian capital market, had at one time or the other been mentioned to the public by the House Committee on Capital Market and we promised to unravel all the ills, part of which are now coming out. They are coming out as a result of our being proactive as a committee. The proposed investigation into the activities of banks vis-a-vis other quoted companies in the Nigerian Stock Exchange, to undertake which the House has mandated the joint committee which comprises the House Committee on Capital Market and House Committee on Banking and Currency, is what is informing all these revelations. Because they know definitely we will get to them. And with due respect to the apex regulator, this is rather coming too late because the apex regulator should have reacted and responded to all these issues before now. There are serious manipulations and insider trading taking place at the Nigeria Stock Exchange. But because the regulator has not been fully proactive and asserted its authority, the things continue to happen. Now that the investigation will soon commence, and the fear of the unknown, is what is making everybody to be on their feet to ensure that they protect themselves and their organisations.
Imagine what has happened in the case of Cadbury. It has been cooking its books in this system for over 15 years but ironically and disgracefully it was not detected by any of the regulators, rather the fraud was detected by Cadbury International when they came to look into their books. So, whatever it is I don't want to talk much so that I will not pre-empt the investigation that is coming. But I can tell you that as much as the Nigerian Capital Market is growing it is also stinking as much.
On what basis, on what ground and what are the justifications that the African Petroleum continues to appreciate in the market? AP has no block; AP is not in joint venture with any oil company that is into oil prospecting, AP is only selling petroleum products, you can imagine the way the shares of AP have been growing so high and so rapidly in the market. That is the question that needs answer because I can't answer it. Everybody wants to know but I'm not joining issues if the DG of the Nigeria Stock Exchange says there is no undercurrent or there is no insider trading, there is nothing wrong, it is a natural flow and it is business permutation or it is market indices that are driving the market, fine and good but we have complained a couple of times.
What do you think would happen to investors' funds with these signals from the market?
Well, shareholders' interest is what we are trying to protect. If by any reason or for any reason SEC and NSE are found culpable, that will have nothing to do with the shareholders' standing or portfolio in the capital market. It will only strengthen it. If you're found weak and somebody waxes stronger with better capacity is brought in to protect what is mine, I stand to be better protected than you and this is an administration that is talking about rule of law. When we make our findings whosoever is deemed to be indicted will be indicted and we take the report of our findings to the House. And then a resolution would be taken on that and would be conveyed to the appropriate authorities for proper action to be taken.
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