SEC’S double standards and investors’ waning confidence

GOING by a popular cliché, “One-man show is a show of arrogance” and that is the modus operandi of the capital market regulator- Securities and Exchange Commission (SEC), which has remained without constituted board for about three years.

Already, investors have described the absence of a constituted board for the Securities and Exchange Commission (SEC) by the Federal Government as high level of regulatory lapse, insisting that such trend threatens efforts aimed at restoring confidence in the market.

The investors who are currently questioning the corporate governance standard of the apex market regulator, wondered why the government has prolonged the issue of reconstituting the board of the SEC, almost three years after the previous board was dissolved.

According to them, the lack of confidence in the market currently is not only election risks, but also the way government treats capital market issues with levity. They argued that SEC is sitting on investment worth over N26 trillion in value, and must operate with a complete board to manage such huge investment properly.

They also pointed out that the prolonged delay portrays poor corporate governance standard, noting that foreign investors cannot invest in a jurisdiction where corporate governance practice is questionable. Specifically, a former Director-general of the SEC, Wole Adetunji, in a telephone interview with The Guardian, described the issue as ‘unfortunate’, nothing that it has not happened in the history of the capital market. He warned that SEC, operating without a board, would affect corporate gov- tion in regulation. SEC is still finding its direction, while CBN has found its feet.

“There is no long-term policy to guide investors and their investments. The government of the day has really failed. SEC is sitting on up to N26 trillion worth of investment in value if you add up all the exchanges and there is no board,” Omodion lamented. The Founder of Independent Shareholders Association of Nigeria, Sir Sunny Nwosu explained that ISA does not allow any substitution for the role of SEC’S board in the capital market. “We should ask ministry of finance what they are doing to reconstitute the board. It is the supervising ministry and their duty is to enforce corporate governance on any institution they supervise.

“I wonder why the ministry is showing blind eyes on the matter and why it is not getting it right. SEC should be a custodian of good corporate governance, so that they can supervise those under their custody,” he said.

For the President, Proactive Shareholders association of Nigeria, Taiwo Oderinde, it falls short of good corporate governance for SEC not to have a board till date. “It turns the director-general into a sole administrator and it does not augur well for the market.” Meanwhile, the Acting Director–general of the SEC, at the commission’s second post-capital Market Committee (CMC), in Lagos, at weekend, said the account statement for the commission is well prepared and ready for endorsement. “The SEC is in charge of corporate governance and there is no way it will want to do that work and punish people who violate the code of corporate governance by being the first to violate that code. We would not do that.