Archive for the 'Nigeria' Category
August 8th, 2010 by Tom Minney
The Securities and Exchange Commission (www.sec.gov.ng) has moved in hard on the Nigerian Stock Exchange (NSE www.nigerianstockexchange.com) on 4 August, ordering the Director-General to leave her post and Alhaji Aliko Dangote, one of Africa’s richest men, to stop acting as NSE President. The SEC appointed the former chief executive of audit firm Deloitte in West and Central Africa, Emmanuel Ikazaboh, as interim manager.
The move comes after years of legal and other wrangling, as reported in this blog on 31 July, culminating in an order from the court to Police to force Prof Ndi Okereke-Onyuke and Dangote to come to court on 27 July to answer charges of contempt after they failed to comply with earlier court orders suspending the August 2009 election of Dangote. The SEC also ordered the NSE Council also to stop meeting.
Meanwhile local media reported that Dangote has accused Okereke-Onyuke of mismanaging the accounts of the NSE, which she has led for 10 and served for 27 years after coming from the New York Stock Exchange. Dangote is reported to have said that the exchange has been mismanaged to the tune of N9 billion ($60 million) and owes N900 million (US$6 million) to the accounts of its subsidiary, the Central Securities Clearing System.
It is a tough move by SEC Director-General Arunma Oteh, who took office at the start of 2010. She pledged tougher regulation of Nigeria’s capital markets, and may have taken the court moves as the prompt to clean up, although many had said tough action by the SEC was long overdue. Last year Central Bank Governor Lamido Sanusi swooped and sacked up to 8 bank chiefs during a $4 billion bailout to clean up corrupt and mismanaged bankers and restore confidence in the banking sector and the capital market urgently needed a clean-up.
Local press reported drama at the Lagos trading floor of the NSE on Thursday, as officials of SEC and the Economic and Financial Crimes Commission (EFCC), accompanied by armed police and plain-clothes security officer came to enforce the dismissal of Okereke-Onyuke. Calm returned on Friday but over the week the NSE All-Share Index shed 105.39 basis points (0.4%) to close the week at 25,738.79 points (http://www.emerginvest.com/WorldStockMarkets/Nigeria) from 25,844.18 points, although company results were also mixed.
One local paper says newly appointed interim administrator Ikazaboh has outlined a 4-point towards the recovery of the NSE. Most important is to stop the slide in market confidence, also responsibility to restore the integrity of the capital market and of the administration, finance and IT. He also aims to continue the agenda of transformation and attain a world-class capital market and let a new DG emerge. Senior stockbrokers apparently rushed there on Thursday to join their dealing clerks, before a closed door meeting with Oteh and other regulators which announced Ikazaboh’s appointment.
Reuters agency says Ikazoboh had 30 years of experience in auditing, consulting and financial advisory services. The website of Akintola Williams Deloitte (www.deloitte.com) says he joined as a Senior Audit Assistant in 1975, became partner in 1982 and senior partner in 1990. The company is auditor of the NSE.
Reuters quotes Kemi Owonubi, head of research at Lagos-based investment bank and stock brokerage Vetiva Capital Management, saying: “The allegations against the former director-general had started having a negative effect on the market.. The market has been in a holding position oscillating at current levels for about a month, even when we have seen positive earnings results from key institutions … It is all about investor confidence.” It also quotes Kayode Akindele, a director at financial advisory firm Greengate Strategic Partners, as saying: “Investors want to know that the regulators have a firm grip of the market.. This strong move by the SEC to get a grip of the situation and try to resolve the leadership crisis can only improve investor confidence, especially if the proposed interim administrator organises elections in a timely manner.”
Taken from material in Reuters, and local Vanguard,This Day and Daily Independent newspapers, among others.
July 31st, 2010 by Tom Minney
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.
June 18th, 2010 by Tom Minney
The Nigerian Stock Exchange (NSE – www.nigerianstockexchange.com but it still does not work well on my computer) is keeping open its offer, made earlier this year, to waive listing fees for downstream oil majors, major telecommunications companies and major government organizations, according to a local newspaper. The offer, meant to encourage them to list their shares for trading on the NSE, was made by Director-General of the NSE, Prof. Ndi Okereke-Onyiuke.
Mr. Sola Oni, Head of Corporate Affairs at the NSE, recently was reported in the Daily Sun newspaper (www.sunnewsonline.com) as confirming the promise to grant free listing to Shell, Chevron and other oil majors if they decide to list on the bourse. The aim is to give investors an opportunity to co-own the companies.
He reportedly said that listing these companies with high market capitalisation would help to widen and broaden the stock exchange. “NSE will always do anything that would help to not only develop the market but result in increased investors’ return on investment”, he is quoted as saying.
The paper says that so far, only petroleum marketing companies and one telecommunications firm are listed for trading. Oil-producing majors have not shown interest. It quotes Prof. Ndi Okereke-Onyiuke as saying that experts have been brought to prepare the ground for the listing of these organisations, but they still feel reluctant to get quoted on the NSE: “We are ready to list the companies free without charging… Getting them listed will bring many benefits to them”.
June 14th, 2010 by Tom Minney
Adlevo Capital Managers (www.adlevocapital.com) announced on 10 June that it has completed the first closing of Adlevo Capital Africa LLC fund with capital commitments of US$52 million. The fund will make expansion capital investments into companies with technology-enabled business models across sub-Saharan Africa.
The fund has received capital commitments from development finance institutions and private institutional investors based in Europe, South Africa and the US. Adlevo Capital plans to hold additional closings for the fund over the next nine months with a final closing in the first quarter of 2011.
Yemi Lalude, founder and Managing Partner of Adlevo Capital, says in a press release: “We are very pleased to have attracted investments from several of the most successful Africa fund investors who, like us, see the growing scope for compelling technology-enabled company investments and believe that investments in this area will also provide positive social development outcomes. The Adlevo Capital team has developed a pipeline of attractive investment opportunities and is looking forward to commencing investments and working with the management teams of its portfolio companies.”
Adlevo Capital, a Mauritius-based fund manager, is the first private equity firm focused on investments into technology-enabled companies across multiple African countries. It aims to capitalize on growing investment opportunities in the technology-enabled service segments of multiple industry sectors in sub-Saharan Africa.
Its founders have a combination of private equity and operational IT experience in Africa and the United States. Through this and an extensive network of relationships, as well as offices in Lagos and Johannesburg, it aims to add significant value to portfolio companies.
In October 2008, the European Investment Bank (www.eib.org) announced it would be lead investor, committing $20 million. EIB said CDC Group (www.cdcgroup.com), the UK government-owned fund of funds, would join as the other lead investor with a commitment of $15 million.
At the time, in a press release Plutarchos Sakellaris, EIB Vice President responsible for lending operations in the African, Caribbean and Pacific regions said: “This is a landmark project for the EIB and for the African technology sector. We are confident that Adlevo’s experienced management will build a portfolio of investments which provide strategic support for technology companies. Moreover, we hope that this operation will act as a catalyst to develop private equity and foreign direct investment in the region.”
May 29th, 2010 by Tom Minney
The Nigerian Stock Exchange (NSE) management has hit back at claims that its trading system is obsolete and urged the country’s Securities and Exchange Commission (SEC) rather to support building confidence in the market. According to reports in Nigerian media, the NSE’s Assistant General Manager and Head of Corporate Communications, Sola Oni, on behalf of Director General Prof Ndi Okereke-Onyiuke, said the NSE uses the NASDAQ OMX system used in 30 countries and one of the best in the world.
She appeared to refer to remarks apparently made in Nairobi by the Director General of the SEC, Arunma Oteh. Mrs Okereke-Onyiuke said the NSE is a dynamic organisation that keeps upgrading its standards according to international best practices. She reportedly cautioned that Government officials should refrain from making statements capable of affecting the delicate balance in the exchange, saying its gains should be supported through confidence building. Mr Oni said the exchange had asked the Commission several times to use usual channels, instead of newspaper pages, to discuss issues.
According to Mr Oni, the NSE All share Index had climbed 30% in the last five months, from 20,817 points to 27,227 points, and trading activity was soaring. “Before the global meltdown, our market was one of the best in the world. But when the crisis came, our market over corrected itself and its fundamentals became low. Consequently, the market became grossly undervalued. Today, it is paying off because the market has become a tourist centre for local and international investors. Almost on daily basis we receive enquiries and welcome visitors”,
Mrs Okereke-Onyiuke confirmed that the SEC had approved the commencement of the new second-tier Alternative Securities Market called ASM/Primpex Market. This will benefit companies who want to be traded, but do not meet the requirements of a full listing. She said: “The ASM is a way of restructuring the second-tier securities market to enable companies takes full advantage of listings; they could migrate to the main market as soon as it is practicable.”
She also denied any leadership tussle over her succession, as she is set to retire in November 2010, aged 60. She said the succession plan for the exchange is seamless, and follows the corporate governance principles of the best privately run exchanges in the world. The SEC has called for an independent company to oversee the search for the new DG.
The 17-strong NSE Council, which includes 8 stockbroking members, is also considering changes to the exchange’s Memorandum and Articles of Association which would allow the exchange to demutualize, in line with a resolution taken at an AGM in November 2006. The exchange would move to having its own shareholders, operating for profit and possibly even listing. The SEC is hoping for a strong role to oversee the demutualization, but responsibility currently rests with the Council.
April 28th, 2010 by Tom Minney
Nigeria’s Securities and Exchange Commission (SEC) has new rules, according to local press. The new rules, signed by Director General Ms Arunma Oteh, became effective from 1 April and reportedly cover:
• Appointment of directors of market operators,
• Bond issues: rules such as conditions to approve Initial Public Offer and listing by introduction, conditions for approval of offers and handling of certificates, rules on corporate and government (state and local) bonds, and cuts in SEC fees for the registration of bond issuance, as well as
• Money market fund rules
• Rules which regulate mergers, takeovers and acquisitions and can order the breakup of a company.
• Set Primary Market registration fee at 0.15%.
The SEC has set deadlines of 30 April for a wide range of companies to publish results. Public companies shall publish “signed” quarterly balance sheet, income statement and cash flow statements in at least one National daily newspaper, while the accounting policies, notes and other relevant information shall be posted on the company’s website which address shall be disclosed in the newspaper publication.
The SEC has directed 143 companies and others not listed, whose shares are quoted on the Nigerian Stock Exchange (NSE), to publish their audited or quarterly results on or before Friday, April 30, 2010. “Financial statements should therefore, be released in the format specified by SAS 30, IAS 34 and the SEC rule B4 (4), to the public, NSE and the commission at the same time.”
Any Company, the SEC warned, “that fails to file the report within the stipulated period would be penalised in line with the provisions of Section 65 of the Investment and Securities Act No. 29 of 2007.”
It reminds companies that such timely financial information serves as the basis on which the investing public takes timely investment and other decisions.
In line with this resolve, the SEC has invited company secretaries and financial controllers of quoted companies to a one-day meeting on 28 April “to address the lingering problem of non-rendition of quarterly and half yearly returns and the attendant penalties such actions attract.”
April 5th, 2010 by Tom Minney
Nigerian media has been writing about the succession of acclaimed Prof. Ndi Okereke-Onyiuke, set to withdraw as Director General and Chief Executive Officer of the Nigerian Stock Exchange (www.nigerianstockexchange.com) in November 2010. She had pledged to stand down several times, linked to a planned demutualisation for the NSE.
This Day newspaper reported that Lance Musa Elakama on 31 March quit as Assistant Director-General of the NSE, saying there was a crisis on the succession. He said he will become a trader on the NSE: “Even though I was denied the number one seat at the Exchange, I am fulfilled, because I was part of the team that built the stock market from a market capitalisation of N171 billion to N13 trillion in 2008. I am fulfilled because the Exchange has several other capable hands that can provide the needed leadership. The Exchange as a system runs an auto cruise.”
Prof. Ndi Okereke-Onyiuke said that it had been agreed in 2008 that the four top managers will retire in line with the restructuring and this had been approved by the Council. Two former General Managers – Mrs. Yinka Idowu and Mr. Henry Onyekuru – have resigned in line with the agreement and she and Mr Elakama remained. The latter had initially changed his mind and stayed on to bid for the number 1 job, but now seems to have backed down after opposition.
According to the report, she said nobody was forced to resign and the NSE had a 10-year succession plan: “We decided that we should groom the young ones among us. The decision to restructure was not decided by one man, never, it was the management’s decision and engaged Accenture, a world renowned management consulting firm, to carry out the restructuring.”
Daily Champion newspaper mentions 2 potential DGs: Mr Kene Okafor, General Manager, New Products Development; and Mr Binus Yaroe, General Manager Quotations and Listing. It notes that challenges will include restoring confidence in the market after a series of crises across Nigeria’s financial and banking sectors, following up a stalled dematerialisation exercise, developing new tradeable products such as derivatives, futures, options, and bond instruments, and further integration of African securities exchanges.
Prof Okereke-Onyiuke has been CEO since January 2000, after joining the NSE in 1983 when she came back from working at the New York Stock Exchange as Exchange Services Manager and Systems Consultant (1976-1983). She has achieved many awards for exceptional leadership and academic excellence, including Officer of the Order of the Niger for distinguished service to nationhood (2001). She is the first woman to head an African stock exchange, and possibly the second worldwide.
Major achievements at NSE include establishing the Central Securities Clearing System Limited (www.cscsnigerialtd.com) as Project Director. It was incorporated in 1992 and started operations in 1997 and, according to its website, offers T+3 settlement (four days after trading). Prof Okereke-Onyiuke was recently the Chair of the African Stock Exchanges Association (www.africansea.org).
March 11th, 2010 by Tom Minney
The Aureos Africa Fund, which closed its fundraising in January with US$381 million, has completed a $10 mln investment in a leading Nigerian leasing company, C&I Leasing Plc. (www.c-ileasing.com). The fund is believed to be the largest fund ever to focus on investing in small to mid-sized businesses across Africa, and the latest investment brings its total investment in Nigeria to $40 mln.
Aureos Capital Ltd (www.aureos.com), a leading private equity fund management company specialising in investing in small to medium-sized businesses in emerging markets, manages the fund. Jacob Kholi, Managing Partner of Aureos in West Africa, comments in a press release: “Leasing is a fast-growing part of the financial services sector in Africa and we are delighted to have invested in a market-leading business that has ambitious expansion plans.”
C&I was established in 1990 and offers companies both operating and finance leases on various classes of assets. The company is active in other services such as car rental, car distribution and other logistics services. In 2007, C&I acquired a Ghanaian lease provider as part of its regional expansion strategy and is also exploring growth opportunities in the telecommunications, oil and gas, and fast-moving consumer goods (FMCG) sectors.
Davinder Sikand, Regional Managing Partner of Aureos in Africa, adds: “As with many other emerging markets, African economies have grown steadily throughout the global downturn. Nigeria is the second-largest economy in Africa after South Africa and with GDP increasing at over 5% per annum, Nigeria offers serious opportunities for private equity investment in SMEs with regional growth ambitions.”
“The success of Aureos in the region reflects its excellent deal sourcing capacity by having seasoned teams on the ground, and the ability to build a well diversified portfolio.”
Kholi says: “Whereas the Nigerian stock markets fell by more than 40% over the last two years, Aureos’ first generation fund’s portfolio in Nigeria grew by approximately 19% in value over that same period. We are excited to be forging strong relationships with small and mid-cap Nigerian businesses, and for Aureos Africa Fund to be able to capitalise on the strong track record we have built with our first generation Aureos West Africa Fund.”
“This new investment… is a demonstration of our commitment to West Africa, with the majority of our Nigerian companies having expanded their revenue base throughout the region.”
Aureos Capital is a private equity fund management company which specialises in providing expansion and buy-out capital to unlisted mid-cap businesses across Asia, Africa and Latin America. Since establishment in 2001, Aureos has increased its funds under management to over $1.2 billion and extended its geographical footprint to over 50 emerging markets, by establishing 16 regional private equity funds.
February 24th, 2010 by Tom Minney
Standard Chartered Private Equity Limited (www.standardchartered.com) recently announced $47.5million investment for a minority stake in Seven Energy (www.sevenenergy.com), a leading Nigerian gas exploration and development company, according to a report in Nigeria’s Vanguard newspaper.
Seven Energy was formed in 2007 and is focused on the provision of gas to leading industrial firms in Nigeria. Standard Chartered envisages that, in the medium term, the investment will Seven Energy’s existing management team in its drive as a pioneer and consolidator within Nigeria’s gas industry.
Christopher Knight, the Managing Director/ CEO of Standard Chartered Bank Nigeria Limited was reported as saying: “We are proud to invest in Seven Energy as Seven’s value proposition is uniquely hinged on the monetization of Nigeria’s substantial gas reserves to meet the country’s growing energy needs. Our established footprint in Asia, Africa, and the Middle East, along with our long history of supporting trade flows to and from these regions, places us in a unique position to provide vital funding to growing companies in growing economies.”
According to the report, Dr Yemi Osindero, Head of Standard Chartered Nigeria’s private equity business, says: “This will be an active year for us in Nigeria. We have long term equity capital available to assist good companies that want to accelerate growth. We also have a knowledgeable team to assist the management and shareholders of our investee companies to achieve their objectives.” Dr. Osindero will join the board of Seven Energy.
Marlon Chigwende, Head of Standard Chartered’s African Private Equity business, says: “We will continue to invest equity capital in strong businesses and management teams across the African continent. After a year of turmoil in the international debt markets, we see a clear need for committed equity to support growth.”
Standard Chartered Plc, headquartered in London and listed on both London and Hong Kong stock exchanges, ranks among the top 25 companies in the FTSE-100 by market capitalization. It has operated for over 150 years in some of the world’s most dynamic markets, leading the way in Asia, Africa and the Middle East. Its income and profits have more than doubled over the last five years, primarily as a result of organic growth.
December 17th, 2009 by Tom Minney
Another step has been taken towards the appointment of the new Director-General for Nigeria’s Securities and Exchange Commission. The Senate last week confirmed the appointment of Ms. Arunma Oteh, currently Vice President Corporate Management at the African Development Bank (AfDB – www.afdb.org) and focusing on the bank’s institutional development.
She has also been AfDB Treasurer (2001-6) and took overall responsibility for the Bank’s fund raising and investments in major international capital markets. Her previous job was Division Manager Investments and Trading Room (1997-2001) and Senior Investment Officer/Senior Capital Markets Officer (1993-7). She comes from Abia State.
The Senate Committee on Capital Market screened the recommendations of President Yar’Adua. The acting DG is Ms Daisy Ekineh.
Ms Oteh is reportedly of Nigerian/British nationality. Before joining AfDB in 1992, she worked in corporate finance, consulting, teaching and research for institutions such as Harvard Institute for International Development of USA and Centre Point Investments Ltd (Nigeria). Her qualifications include a Masters’ Degree in Business Administration from Harvard Business School and a 1st class BSc honours degree in Computer Science, from the University of Nigeria Nsukka. She has received a Harvard Fellowship Award and a National Merit Award.
She is on the Board of organizations including the Advisory Board of African investor and charity the International Financing Facility of Immunisation (IFFIM) set up by governments to fast-track immunization for achieving the Millennium Development Goals (MDGs).
It is not clear when she takes over the hot seat. Nigeria’s SEC is busy with investigations into capital market fraud and insider dealings as part of a grand clean up of the Nigerian financial sector. it does not have a website.