Abuja — The crisis of confidence that had stalked the Nigerian Stock Exchange (NSE) for many years came to a head recently. Just before the authorities finally wielded the big stick, the news was that the NSE was reportedly enmeshed in financial hot waters and in alleged insolvency.

Blowing the whistle was Aliko Dangote, its president who was also affected by the clean-sweep action taken by erstwhile Securities and Exchange Commission (SEC). Dangote accused the management of the NSE under the sacked Director General, Dr. Ndi Okereke-Onyiuke of misappropriating some N11 billion between 2007 and 2008. In his petition to the SEC, Dangote said only N4.2 billion of the total amount was used "to develop the market."

He also queried other running costs, including the use of N450 million for international travels; N125 million for business and local trips and N70 million for trips to Abuja. Dangote expressed dissatisfaction with the sub-head from which N98 million was spent on staff training and development. That was not all. The NSE was yet to submit an audited report for the year ended December 2009, eight months after it fell due and to present the first and second quarter financial statements for 2010 as required by its own laws, Dangote said.

In a swift reaction to the petition, the SEC announced the removal of both Dangote and Okereke-Onyiuke and appointed an administrator for the exchange pending the resolution of the current imbroglio. The announcement was greeted with mixed reactions, with some arguing that the SEC acted beyond its bounds in interfering with the running of a private organization; others welcomed it. Infact that is why many others wondered why it took so long before SEC could act. However, the SEC is empowered by law to supervise the stock exchange and to take any action it may deem necessary to safeguard investor's funds and protect the Nigerian economy from any action that may negatively affect it.

It is also curious that despite the festering crisis in the NSE that had lasted for several years, the SEC would take action only shortly after a petition to it by one of the actors in the Exchange.

Be that as it may, the SEC's decisive action was late in coming. It may be true, as some in the stock brokerage business have claimed, that the NSE witnessed sharp growth under Okereke-Onyiuke; but it is equally undeniable that in recent years, she dabbled into ventures that cast doubts on her professional judgement. Some observers believe some of these ventures were inimical to her position as head of Nigeria's premier stock exchange. One the most celebrated was her involvement in the Transnational Corporation business and the other being her organization to secure funds for Barack Obama's presidential campaign in 2008. Either of these infractions was serious enough to have invited severe reprimand; inexplicably, she was let off without as much as a slap on the wrist by the same SEC.

This week, the SEC revealed to a hearing of the House of Representatives Committee on Capital Markets that in the period that the crisis lasted, seven million Nigerian may have lost investments. Arising from all these, over 250 stock broking firms would be arraigned before the relevant tribunal, according to the SEC. If the SEC had been proactive, these would perhaps have been averted. The exposé by Dangote should be thoroughly investigated beyond the role of the ousted DG as it smacks of a tip of an iceberg in a potential cesspit of wrongdoing. Normalcy must be restored to the stock exchange to safeguard investor's fund, restore public confidence and protect the Nigerian economy. This would require following due process in the election of a new leadership. The tenure of the interim administration must not be too long in order not to send the wrong signal to the investing public. The NSE must evolve transparency models and build a strong and virile institution in which overbearing officials would find it difficult, if not impossible, to operate freely. It must also play by the same rules it imposes on the people with whom it works as the best way of restoring confidence in its leadership and work.