Nigeria Stock Exchange – Dangote’s struggle to be President, also denies management succession crisis
The Nigeria Stock Exchange (NSE – www.nigerianstockexchange.com, working intermittently) on 26 July denied that there was any succession crisis. Court cases on the succession had led to there not being any meetings of the Council, said the NSE. Myriad court cases have dogged Nigeria’s capital markets.
Latest court wrangles follow the 6 August 2009 election as NSE President of the man who is reputedly Africa’s richest, the reported billionaire business mogul Alhaji Aliko Dangote. According to some reports, last week the court ordered Police to bring him and the NSE Director General Prof Ndi Okereke-Onyiuke to court to face contempt charges, which they are appealing.
The following is a quick and selective summary of materials found on the Internet.
In April 2009, Nigeria’s Securities and Exchange Commission (SEC) cleared Dangote of involvement in manipulating shares in African Petroleum Plc (AP), which had accused him of instructing a stockbroker to force down its stock price more than 80%. The election at which Dangote became NSE President was 2 days after a court order of 4 August.
Later, 15 aggrieved AP shareholders filed a suit against: Dangote, Nova Finance and Securities Limited, the NSE including Director-General (CEO) Prof Ndi Okereke-Onyiuke, the Securities and Exchange Commission and 10 defendants over the alleged share price manipulation. They sought to nullify Dangote‘s election on the grounds of disobedience to the previous court order.
This was supported by the ruling of Justice Lambo Akanbi in the Federal high Court on 12 March, that the action of the NSE and the Securities and Exchange Commission in conducting the election and electing Dangote as NSE President was contemptuous of a court order. He set aside all the steps taken by the NSE and SEC on the issue.
Dangote was dissatisfied with the verdict and appealed against his removal as the NSE Ppresident. On 6 July 2010 Justice Raphael Agbo of the Court of Appeal in Lagos struck out the application and awarded N10,000 costs in favour of the respondents. The date of 4 November has been set for hearing a fresh application by Dangote.
A further session of the Federal High Court in Lagos on 14 July requested Dangote, Okereke-Onyiuki and others to appear to answer contempt of court claims, that Dangote had been acting as President with the support of Okereke-Onyiuki, including presiding over meeting of Council in late June and receiving a dignitary. The Court gave 22 July as a date for them to appear before it and face potential prison for contempt, but the two said they were unable to appear. The Court, presided over by Justice James Tsoho, ordered the Police to compel them to appear on 27 July. Lawyers for the two are said to be appealing.
Reuters quotes African Petroleum as saying a year earlier that the alleged share manipulation was linked to a dispute between Dangote and AP Chairman, Femi Otedola, who is also a business mogul, with vast interests in oil and gas, shipping, cement and real estate. Otedola is reportedly the other Nigerian on last year’s Forbes billionaires list, with reported wealth of $1.2 billion.
On the succession to Okereke-Onyiuki, who retires after a distinguished career, the Daily Trust newspaper quotes an NSE spokesperson as saying that the exchange had a succession plan since April 2008. However, as a peace-loving organization, the bourse had agreed to comply with the position of the Securities and Exchange Commission to advertise proposed positions for senior executives.
The report quotes the NSE spokesperson: “This is going on as scheduled with Accenture, only for these agents of destruction to raise false alarm in order to scuttle the recruitment process.” The NSE claims that since the court ruled last year barring Dangote from parading as NSE president, the exchange has been conducting its operations via committee since the court order did not ask for the shutting down of the market. “NSE is a law-abiding corporate citizen; hence Ndi Okereke-Onyiuke has never called any National Council meeting whatsoever and has no plans to call one. The orchestrated claims by the faceless detractors that there is succession crisis at the NSE are absolutely false.”
Justice Akanbi was scathing in his judgement in March on teh contempt of court, according to the report in the Vanguard newspaper: “..like every judicial official, I feel troubled and tremble each time I see any Chief Executive of a government agency or establishment and their minions spurn the treat the order of court with levity, leaving the impression that since the court have neither the police nor guns nor the army to enforce whatever orders they make, they should be treat such orders with impunity.
He condemned both the NSE and the SEC: “the conduct of all officials of the NSE and SEC, who organised and/or participated in the purported election of Dangote is reprehensible and highly condemnable. They perhaps look at the court and think that it can only bark but cannot bit.
“This court will make them see that our teeth are not only sharp, they can be poisonous when they chose to bite. The court will not allow them to treat the court orders as useless by refusing to obey them lest anarchy may set in..”.
According to the BBC website, Dangote, group president and CEO of the Dangote Group, is reputed to be Africa’s richest man, with Forbes magazine in the United States estimating his fortune two years ago at $3.3bn (£2.3bn). His wealth was built on a business empire that he founded in 1977 and now includes the number one sugar production company in Nigeria, a cement factory and textile products, plus he was made a Commander of the Order of the Niger five years ago. He is a long-standing supporter of English Premier League soccer team Arsenal FC, but in May denied he was buying a 15.9% stake in the club that is reportedly on the market.
The story is based on reports in Daily Trust, Vanguard and Punch newspapers together with www.bbc.co.uk/sport, www.reuters.com, www.itsnaija.com and www.huhuonline.com. We do not vouch for the accuracy or completeness of the reports.