OTTEH ACCUSES ONYUIKE OF FINANCIAL RECKLESSNESS
Director General of Security and Exchange Commission (SEC), Arunma Oteh, has accused the former head of the Nigerian Stock Exchange (NSE), Ndidi Okereke-Onyuike of leading an era of broad financial abuses and violations of processes, which in large part accounted for the capital market crash that cost investors billions of life savings and funds.
At the resumed hearing of the House of Representatives Committee on Capital Market investigating the near collapse of the sector, Otteh told the committee member that the market was characterized by financial slimmings, misappropriations, false accounting, misrepresentations, and questionable transactions many of which were done reportedly in connivance with commercial banks.
“The extent and nature of the market abuses carried out between 2006 and 2008 are the primary reasons for the continuation of the investor apathy that we see today,” Ms. Oteh said.
The SEC boss revealed that the NSE under Onyuike bought a yacht for N37million and wrote down the book value within one year by recognizing it in the books as a gift presented during its 2008 Long Service Award (LSA), without any records of the beneficiary till date, while another sum of about N186million was spent on the purchase of 165 Rolex wrist watches presented as gifts for awardees, out of which only 73 were actually presented to the beneficiaries, while the outstanding 92 watches valued at N99.5million are still unaccounted for.
Testifying on other fraudulent transaction in the NSE under Onyuike, Ms. Otteh fingered several banks that engaged in fraudulent transactions in violation of Capital market and SEC rules. Acording to the SEC Boss, “These transactions were routed through companies owned by some senior officers of the Exchange.
“Between August 2006 and December 2008, the Executive team of Finbank engaged six law firms to incorporate 95 companies and transferred more than 4425 billion of depositors’ funds to nine of these companies, and purchased 2.8 billion units of its own shares against SEC Rules.
“Between June 2007 and December 2008, Intercontinental Bank (now under Access bank), its Directors and principal officers engaged in unlawful share buyback schemes, buying about 3.4 billion units of shares using depositors’ funds. It violated Section 105, 106 and Section 110 of ISA 2007 as well as Section 160 of CAMA and Rule 109b of SEC Rules, she said
Other fraudulent transactions revealed by the SEC boss include the reclassification of the sum of N1.3billion originally expended on business travels, out of which N953million was reclassified under “Software Upgrade” and subsequently expended as against being capitalized. She also spoke about some transactions done outside the floor of the exchange by Falcon Securities, Fidelity Finance and Spring Capital where Shares owned by 1,258 entities (some fictitious) and individuals were merged into14 accounts of nine companies, some of which were owned by Afribank and its Directors.
Hearing continues today.