Capital market: Okereke-Onyiuke, four others shared N1.13bn – Report
By Yemi Kolapo and Gbenga Agbana
Tuesday, 9 Nov 2010

Five top officials of the Nigerian Stock Exchange allegedly shared N1.13bn productivity allowance between 2006 and 2008, findings by forensic auditors appointed by the Securities and Exchange Commission to audit the accounts of the Exchange have revealed.

A copy of the auditors’ report, obtained by our correspondents on Monday, alleged that the immediate past Director-General, NSE, Prof. Ndi Okereke-Onyiuke, was paid N592.55m in the three years, representing 52 per cent of the total amount shared.

The former DG was alleged to have collected N58.10m, N334.45m and N200m in 2006, 2007 and 2008, respectively, the report, prepared by KPMG and Aluko Oyebode and Co, said.

It added that a former Assistant Director-General of the Exchange, Alhaji Musa Elakama, was given N309m in the three-year period, amounting to 27 per cent of the total surplus shared.

According to the auditors, a former General Manager, NSE, Mrs. Yinka Idowu, allegedly got a total of N103.22m under the payment, categorised as ”Total Productivity/Surplus Sharing Paid to Management,” between 2006 and 2008.

Another former General Manager of the Exchange, Mr. Henry Onyekuru, was said to have been paid N108.6m, while the Secretary to the Council, Mrs. Josephine Igbinosun, allegedly got N21m in the review period. Staff members were also paid N1.2bn and N720m in 2007 and 2009, respectively, the report said.

The auditors also found out that, in 2008 alone, N1.9bn was spent on ”business travel overseas,” prior to reclassification, saying that after reclassification, N953m was classified as ”software upgrade” and ”immediately expensed as opposed to being capitalised.”

They added that the Exchange spent N450m in 2007 on BTO, as against the annual N60m budget, while N297m was spent for the same purpose in 2009.

The report disclosed that the NSE transferred money to the NSE Consult (a wholly-owned subsidiary of the Exchange) for the purpose of trading and investing in the stock exchange on its behalf.

It added, however, that investigation ”is ongoing as to whether the NSE Consult was used as a tool for insider trading in contravention of Section 112 of the Investments and Securities Act.”

The forensic auditors also alleged that Candy Floss Limited, owned by Mrs. Yinka Idowu and Mr. Emmanuel Idowu, received the sum of N342.4m in respect of the Long Service Award, organised in 2008 by the Corporate Affairs Department of the Exchange, headed by Idowu.

They added that Kingdom Securities Limited and KSL Consultants Limited, owned by Onyekuru, allegedly received N125.8m for the reactivation of the Second-Tier Market and the creation of the Third-Tier Market between 2006 and 2007. Onyekuru was a general manager of the Exchange during this period.

The report said, Igbinosun, in an interview with the auditors, claimed that the amount paid to council members was not productivity surplus, adding that ”although, the minutes of March 2009 referred to productivity bonus, she had simply recorded the deliberations wrongly, while the term, ‘productivity bonus,’ was only in relation to staff members.”

The report quoted the company secretary as saying that she had never advised the Council that the distribution of surplus was a contravention of the provisions of the Companies and Allied Matters Act because she was never consulted, adding that even if she had been consulted, it would not have changed their decision to make the distribution.

The auditors‘ findings, according to the report, revealed that there ”were questionable contracts awarded to companies owned by members of staff (or companies in which members of staff owned shares); and purchase of assets by the NSE, which either disappeared from the books of the company or were subsequently written off the books under questionable circumstances.”

It was also found that funds belonging to the Exchange were used for personal businesses ”and the maintenance of staff members and their residences.”

Meanwhile, the Interim Administrator, NSE, Mr. Emmanuel Ikazoboh, told one of our correspondents on Monday that the full report of the forensic audit would be submitted to SEC on Friday.


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