'Ownership of Nigeria Stock Exchange Should be Open'
Stock Market
From Kunle Aderinokun in Abuja
Member, Investment and Securities Tribunal (IST) and Executive Chairman, Rosehill Group, Alhaji Suleiman Yahyah has proposed that that the Nigeria Stock Exchange (NSE) be 'de-mutualised.'
In an exclusive interview with THISDAY in Abuja Yahyah said, "the ownership of the Nigerian stock exchange is not clear, we must de-mutualise this ownership, we must open this ownership to transparent processes, elections, there must be retirement."
He pointed out that exchanges that are 'mutualised' "are more susceptible to not meeting corporate governance standards because the ownership is not dispersed and investors are not owners."
He cited that the Johannesburg Stock Exchange, the New York Stock Exchange that are demutualised have "shown greater tendency to adhere to higher standards of corporate governance and that is the trend. And to meet with international best practices, that is what is expected, so that the ownership structure is more transparent, owners can go in and go out and manager can be hired and be fired and they will be subject to more responsibility, accounting responsibility and still maintain their independence and their regulatory market leadership responsibilities that they have to do."
By de-mutualisation, he meant that ownership of a stock exchange would be opened to all investors but not just to mutual owners like stockbrokers and some select investors only, as is the case now.
He decried the current structure whereby there is no clear way of electing the director-general of the stock exchange adding that the position does not have a tenure and retirement age.
"There is no structure for electing the director-general of the Nigerian stock exchange, the ownership of the Nigerian stock exchange is not clear, we must de-mutalise this ownership, we must open this ownership to transparent processes, elections, there must be retirement. "We cannot have director-generals who can never be retired, we must have a tenor system, we must have a clear succession system, we must have clear ownership system, it must not only be owned by stockbrokers and certain interest as an self-regulatory organisation," he said.
Yahyah said the issue of corporate governance has become very important consequent upon the recent developments and scandals that occurred on the international scene and the local community.
According to him, "of course we have our own problems in Nigeria, but the major scandal is the Enron issue.
As you can see it was a problem of corporate governance and problem of regulation. So in Nigeria, before we have our own major problems, we believe that we must improve on the ethics of corporate governance and compliance to corporate governance and the first point of call will be the gate keepers; the accountants."
Although, he said under normal circumstances, information provided by the accountants should be relied upon but "we cannot at this stage, accept the way the accountant present information they present."
He frowned the clause in the financial statements, which states that the only directors are liable.
"There must be a change in that, there should be a law or regulation that will force accountants to accept full liability for accounts that they audit, not only directors liability, the accountants must be liable," he maintained.
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