Archive for the 'Nigeria' Category
December 16th, 2010 by Tom Minney
Citigroup (www.citigroup.com) expects to see strong demand for Nigeria’s $500 million debut Eurobond despite volatility in global capital markets, Chief Executive Vikram Pandit told reporters in Lagos on 8 December, according to a report on Reuters: “We believe that there will be significant demand for a bond offering from Nigeria and it is evidenced by demand from not only from investors … in developed markets but also emerging markets”.
Citi is the lead book-runner for the 10-year bond, which aims to establish a benchmark for Nigeria in the global market and allow local companies to follow suit, enabling them to raise long-term funding more cheaply than at home.
Pandit declined to comment on the timing of the issue.
Reuters says “banking sources” have said Nigeria plans a roadshow to the U.S. this week (the week starting 13 Dec) and may talk to some European investors directly in a bid to complete the deal before the end of the year, though the timing will depend on market conditions.
Pandit said “It will be a question of how you price the bond so that it is not only priced to create the right benchmark at the tightest price but also trades well in the after-market.”
December 6th, 2010 by Tom Minney
Templeton fund manager Mark Mobius picks China and Nigeria as tips over the next 12 months, according to an interview with Reuters. Mobius oversees more than $40 billion as chairman of Franklin Templeton’s Emerging Markets Group.
He said Chinese firms in sectors linked to consumption, such as food, clothing, restaurants and services, could pose good investment opportunities as the consumers in China get wealthier.
Aside from opportunities in the so-called “BRIC countries” – Brazil, Russia, India and China – Mobius says there are favourable prospects in frontier markets. Nigeria is his top pick: “I know it’s way out in terms of people’s minds. The risks are there of course. But it’s a big country, it’s one of the biggest in Africa, and it’s a fast-growing country, so I think there’s a great opportunity there.”
He said the biggest risk was that too much money would be invested in the market, chasing too few stocks. This needed to be balanced by a good supply of initial public offerings and secondary issues. “.. that balance is very, very important because you’ve got to get this money in a home where it’s relatively safe. And some of these IPOs are in pretty good shape, so that’s something we have to watch very carefully,” he said.
November 30th, 2010 by Tom Minney
The recruitment of a Director-General and Executive Directors for the Nigerian Stock Exchange (www.nigerianstockexchange.com) will be completed by first week of December, according to news reports of the NSE’s 49th Annual General Meeting in Lagos on 23 November.
The NSE’s Interim Administrator Emmanuel Ikazoboh said the appointees will be presented to the Securities & Exchange Commission (www.sec.gov.ng) in the second week of December. However, they will have to be confirmed at an extraordinary general meeting (EGM) of the NSE next year.
The issue of demutualization of the NSE to a for-profit company with shareholders and share capital exchange will be considered. Mr Ikazoboh reportedly said the process will be left to the incoming management team to handle, just as he added that “the SEC is also studying the concept and how it has worked or not in other jurisdictions” across the world.
A motion by Interim President, Bullama Manu to adopt the NSE accounts for the year ended December 2009 had to be put 3 times before it was seconded and adopted, after senior brokers who reasoned that there was need to conclude the meeting, to allow the exchange begin afresh.
Election and re-election of members, including the resignation of 3 council members, was removed from the agenda, after the NSE’s external lawyers advised that there should be no elections until a legal suit was disposed of by shareholders of African Petroleum Plc against Femi Otedola and others. In to form a quorum of properly constituted council for the NSE, the meeting resolved that the bourse should co-opt members to fill the vacancies in consultation with dealing member firms represented by the Association of Stockbroking Houses of Nigeria (ASHON) and stockbrokers through the Chartered Institute of Stockbrokers (CIS).
According to the reported accounts, gross earnings fell by 78% to N4.485billion (US$29.8 million) from N18.7 bn, out which operating loss stood at N2.5 bn in 2009 from a previous surplus of N2.0 bn.
Mr Manu stressed “fairness to all” was the NSE’s principle and said there is emphasis on ensuring adherence to post-listing requirements and the principles of good corporate governance. He promised greater consultation with stakeholders and hoped that the Asset Management Corporation of Nigeria (AMCON) and ongoing financial sector reforms would brighten the outlook. Lawyer, banker and market operator Okechukwu Unegbu praised the NSE management for organizing one of the best AGMs in several years, going by the attendance, free expression and robust contributions.
November 30th, 2010 by Tom Minney
The Nigerian Senate’s Capital Market Committee summoned the Director General of the Securities and Exchange Commission (www.sec.gov.ng) Arunma Oteh and the Interim Administrator of the Nigerian Stock Exchange (NSE – www.nigerianstockexchange.com) Emmanuel Ikazoboh to appear at hearings on 29 November. According to a news story in the Daily Independent (www.independentngonline.com) newspaper, they felt they had not received sufficient responses to inquiries and wanted a report on activities.
The Senate has been sending queries since the 4 August dismissal of NSE Director General Ndi Okereke-Onyiuke. They also feel that the SEC acts as if it is independent of supervision, especially by the Senate. One example was that the audit of the NSE, dated October 8, was only received by the Committee a month later, unsigned by KPMG the auditor. When other queries were also not answered, the Capital Markets Committee returned the audit and the SEC reportedly said it was the best they could do.
Last week the House of Representatives Capital Market Committee summoned the two to a public hearing to discuss amendments to the Investment and Securities Act to ensure the autonomy of the SEC. There have been reactions, according to the report: The SEC has only submitted its financials to its supervisor, the Finance Ministry. This, the House reportedly said, makes it unable to effectively perform its oversight functions in the interest of national good. The last published account by the SEC is believed to be that of 1991/92.
The committee was apparently concerned “that the provisions and expenditure for board member allowances were quite significant and alarming for a public sector agency.” House Capital Market Committee Chairman, Umar Jubril, reportedly disclosed that the SEC generated N16 billion (US$106 million at current exchange rates) in 2006, N13 bn (2007), N8 bn (2008), and N3 bn (2009).
However, a market source reportedly told Daily Independent that the total figure should be about N68.5 bn, judging from computations from publicly available data, including fees from private placements approved by the SEC, mergers and acquisitions, and recovery costs of proceedings.
The House of Representatives Committee on Capital Markets has also directed the SEC to reverse its decision sacking Prof Okereke-Onyiuke, according to news reports last week. The committee asked the SEC to look into her letter of voluntary retirement (16 June, to be effective 15 Dec) and allow her to proceed on her terminal leave as stated in her notice. NSE has also been ordered to forward its audited 2009 report and both first and second quarter 2010 reports to SEC for onward transmission to the National Assembly.
November 5th, 2010 by Tom Minney
The Nigerian Stock Exchange (www.nigerianstockexchange.com) saw its capitalization boosted by the Naira 2.1 trillion ($14 billion) listing of Dangote Cement on 26 October. The company (DANGCEM.LG) listed 15.5 bn shares at N135 each (US 90 cents) after a merger in October with local rival Benue Cement. It is the country’s leading cement maker and the biggest listing on the NSE.
According to a company press release, Dangote Cement executives said the firm plans to sell a further 20% of its shares, worth $2.8 bln based on the listing price, in a global offer over the next 18 months, probably in London. Listing broker Afrinvest said 25% percent of the shares were theoretically on offer in Nigeria but the local market, whose capitalisation was just over N6 trillion before the listing, was unlikely to have the capacity to buy that amount. The regulator in Nigeria requires a 25% free float.
According to the press release, Afrinvest Chief Executive Godwin Obaseki said: “Because the market is not likely to absorb all of that quantity, the (stock exchange) council has given a special dispensation to sell the remainder over the next two years,”
Holding company Dangote Industries Limited had held majority stakes in both Benue and Dangote Cement and the free float was initially only 4.1%. The owner of Dangote Industries is Nigerian industrialist Alhaji Aliko Dangote, ranked by Forbes the richest man in Nigeria and one of the richest in sub-Saharan Africa. Dangote sold $154 million worth of shares to bring the free float to 5.2%. Dangote’s business interests include listed flour and sugar companies.
He said of the listing that he wanted “to create an African champion that can compete with the largest cement companies in the world”. He said the transaction is taking place “at a crucial moment in the history of cement demand and supply, and at a crucial moment in terms of Dangote’s pan-African ambitions.”
He is setting up cement plants and import terminals around Africa including in Ethiopia, Ghana, Ivory Coast, Senegal and Zambia, and aims to produce 46 million tonnes of cement a year in Africa by 2015, of which 30 million will be made in Nigeria. Dangote told reporters he plans to transfer all his cement assets outside Nigeria — currently owned by Dangote Industries — into Dangote Cement by the first quarter of 2011.
The aim of the merger with Benue was to allow Dangote’s cement operations better access to financing, as well as consolidating supply and distribution chains, reducing costs and helping increase cement production more quickly.
Another press release announced that a deal was finalized on on 15 October through which Dangote Industries Limited upped its stake in Sephaku Cement (Pty) Limited, which is based in South Africa, from 19.76% to 64% with a R779 million ($115 million) investment into Sephaku. The press release says this is the largest foreign direct investment (FDI) by an African company into South Africa.
The deal was concluded at the shareholder general meeting of Sephaku Cement on 15 October 2010 and formally announced to the media and investor recently.
Many commentators are very positive about the listing, forecasting a higher price shortly. All concede that it is too big to ignore and anyone investing in Nigeria must take account of this, since it makes up 25% of market capitalization and is one of the most active stocks. However, some analysts wonder whether the ambitious growth targets are to be achieved and whether the share justifies its high rating compared to global cement companies such as Lafarge. The share price was given as N128.25 at the close of 4 November on this helpful website (www.stockmarketnigeria.com).
However, all seem to admire the way Dangote succeeds in difficult environments, building his own infrastructure including power, rail and other needs, if poor national infrastructure is blocking growth and supplying desperately needed inputs for Africa’s economic growth.
The group website (www.dangote-group.com) says the company “is a fully integrated cement company and has projects and operations in Nigeria, Benin and Ghana; with total existing production and import capacity of 14 million tons per annum and new production projects in development with 11.1 million tons per annum additional capacity.
The Company operates the Obajana Cement Plant (OCP), the largest cement plant in sub-Saharan Africa. Aggressive growth plans target a strong pan-African presence as Dangote Cement evolves to become a truly multi-national corporation.
As part of this drive, Dangote Cement is committed to making Nigeria a net exporter of cement. The company owns four terminals, two in Lagos and two in Port Harcourt through which it currently imports cement. These operations will progressively be replaced and converted into export terminals as new production capacity comes online in Nigeria.”
October 17th, 2010 by Tom Minney
The African bond market continues to expand, with many countries raising money on world capital markets. They are taking advantage of low global interest rates and many investors turning to African debt, partly fuelled by better economic management in Africa. Yields are near zero in Europe, the U.S. and Japan, and investors are looking to new frontiers.
Africa has massive capital needs to fuel its anticipated long growth run. The temptations to rack up debt again remain. The World Bank estimates that Africa needs to spend $93 billion a year on power, transport and water projects over the next decade to lift growth in the world’s poorest continent.
Bloomberg news agency reports that Nigeria appointed Barclays Capital in October as an adviser for its planned $500 million Eurobond. Zambia plans to raise $1 billion on the back of a planned sovereign credit rating this year.
Other African nations are dusting off plans to sell Eurobonds – bonds issued in an international currency, not the local one – to international investors. Many plans had been shelved in the global financial crisis in late 2008.
Bloomberg quotes Tanzania’s Deputy Finance Minister Omar Yusuf Mzee as saying that Tanzania is returning to work on its bond plan after postponing a sale of $500 million of the securities in 2008.
Angola has been talking for some time about raising $1 billion – $2 bln through international bonds this year. It received a B+ credit rating from Standard & Poor’s and Fitch Ratings in May.
Kenya plans to wait on its planned $500 million sovereign bond as the global recovery is “still uncertain,” according to Geoffrey Mwau, economic secretary in the Finance Ministry reportedly in August.
Sudan is next year to seek investors from the Persian Gulf region for $300 million of Islamic bonds because U.S. economic sanctions have denied the country access to other international markets, central bank Governor Sabir Hassan told the agency in an interview in Khartoum on 6 Sept.
Economic growth for Africa is expected to be more than 5% a year, says Bloomberg, fuelled partly by investment from China and India and partly by its own growing consumer spending. Infrastructure to be upgraded includes obsolete road and rail networks and power generation, where may countries face more power shortages – Bloomberg says that a continent of 1 billion people that has electricity capacity equivalent to Spain.
Bloomberg cites Samir Gadio, an emerging- markets strategist in London at Standard Bank Group Ltd: “The timing is perfect. Global yields are extremely low and that’s pushed a lot of countries to tap international markets. We’ll see good demand for these bonds. There’s just so much excess liquidity across the globe.”
South Africa’s $2 billion bond maturing in March 2020, yielded 3.69% recently (on 11 October), 138 basis points lower than when the securities were sold in June, according to data compiled by Bloomberg. The yield on Ghana’s 8.5% dollar-denominated bonds, due October 2017, has fallen 239 basis points to 5.78% during 2010.
According to the report, David Damiba, managing director in London for Renaissance Asset Managers,says: “It’s a fantastic idea to diversify their sources of funding. It’s important that these countries would want a benchmark bond” so that other assets can be priced appropriately by investors.
Another proponent is Stuart Culverhouse, chief economist of London-based Exotix Ltd., which advises clients on investments in illiquid markets. “Africa is relatively new to investors. After the last 20 to 30 years of really bad news, the past 5 to 6 years have been generally positive. There’s a cash pile just waiting to be invested. African Eurobonds will definitely be well-received.”
Some economic fundamentals have improved in Ghana, Zambia, Nigeria, Tanzania and Uganda. Most of their foreign debt, totaling about $33 billion, was canceled by lenders such as the International Monetary Fund and the U.S. starting in 2000.
Nigeria’s sovereign debt was 15% of gross domestic product in 2009, according to data from the IMF. That compares with 115% in Greece, 77% in Portugal and 116% in Italy. The report cites the IMF’s April 2010 Regional Economic Outlook for Sub-Saharan Africa. as saying in 2009 government debt was 26% of GDP in Zambia, 37% in Tanzania and 60% in Ghana.
Eurobond sellers will have to rein in fiscal deficits and limit any shortfall in their current accounts, to show that they can repay the money.
“It puts the countries on their toes,” said Kofi Wampah, first deputy governor of the central bank of Ghana, which is considering selling its second security in international markets, speaking to Bloomberg in an interview from his office in Accra on 7 Oct: “You have to ensure that your fundamentals are always right.”
October 11th, 2010 by Tom Minney
Nigeria’s Securities and Exchange Commission (www.sec.gov.ng) has commissioned a forensic audit into affairs of the Nigerian Stock Exchange (www.nigerianstockexchange.com). The SEC released a statement on 6 October which says the members of the NSE Council, including the former CEO, paid themselves N 1.35 billion (US$8.93 million) in illegal “productivity/surplus” bonuses, according to local news reports.
The SEC has reportedly directed that the Interim Administrator of the NSE, Emmanuel Ikazoboh should take steps to recover all such shared “bonuses” from the Council members.
According to a report from the NSE Auditors, Messrs Akintola Williams Deloitte, who had wanted to qualify the NSE accounts for the year to December 2009 on the basis that “an accrued N1.2 bln had been distributed to employees and council members as bonuses and share of surplus respectively in the current year. This is contract to section 26(3) of Companies and Allied Matters Act, Cap C20 LFN 2004 and section 6 of the Memorandum and Articles of Association of the Exchange, which stipulated that the income and property of the exchange shall applied solely towards the promotion of the objects of the Exchange and no portion therefore shall be paid or transferred directly or indirectly by the way of dividend, bonus or otherwise.”
The SEC statement says similar payments had been made since 2006, through to 2008:
2006 – N160.8 mln was shared by 18 members of the members.
2007 – N710 million shared by 16 members.
2008 – N480 million was shared by 18 members of the council.
The immediate past president, Oba Otudeko, got the lion’s share of the bonus of N238 million followed by the former director general of the exchange, Ndi Okereke-Onyiuke with N146.8 million, Dr. Raymond Obieri N110 million, Erastus Akingbola N80 million, Alh. Mohammadu Koguna N67 million while Mr. Godwin Obaseki and B. E. Sobamowo, Nduka Nwonye got N64 million each. Billionaire Alhaji Aliko Dangote, ordered to stop acting as NSE Council President in August, has reportedly already returned N40 million in bonuses, the first to do so.
The SEC had appointed law firm Aluko & Oyebode and the accounting firm KPMG to investigate the allegations of financial mismanagement at the Exchange. Independent Investigators commenced work on Thursday August 5, 2010 by securing data and document sources.
The matter of bonuses had held up the audit of the accounts for the year to December 2009. NSE’s External Auditors, Messrs Akintola Williams Deloitte (Mr Ikazoboh was the former CEO) had eventually signed off an unqualified set of accounts after previously wishing to add a qualification based on the fact that an accrued sum of N1.2 billion was distributed to employees and council members as bonuses and shares of surplus respectively.
According to the SEC statement issued by Mr. Lanre Oloyi, Assistant Director/Head Media, SEC, the NSE Council approved the 2009 audited accounts of the NSE at its meeting on 28 September 2010. The Investment and Securities Act mandates that these be submitted to the SEC,which Mr Ikazoboh did on 30 September.
September 8th, 2010 by Tom Minney
The Nigerian Stock Exchange (www.nigerianstockexchange.com) could be up for restructuring into a corporation through a demutualization process, and foreign exchanges may be invited to invest. Ms Arunma Oteh, Director General of the Securities and Exchange Commission (www.sec.gov.ng), according to the local Leadership newspaper (www.leadershipeditors.com/ns/), on 3 September said the strategy is that the SEC will bring in “a first-class team” to run the exchange: “What we expect is the principal officers will come onboard, at the latest, in the beginning of next year. After they come onboard, what we intend to do is to put in place a timeline for demutualization.”
As reported in this blog, on 4 August the SEC removed Prof Ndi Okereke-Onyiuke from her post as NSE Director-General and told Alhaji Aliko Dangote to stop acting as the exchange’s president. Mr. Dangote, head of a business conglomerate, is one of Africa’ richest men.
The regulator appointed the former chief executive of audit firm Deloitte in West and Central Africa, Emmanuel Ikazaboh, as interim manager of the NSE.
Ms. Oteh reportedly said recently in London that one model that is “fascinating” is the deal between Brazil’s BM&FBovespa exchange (www.bmfbovespa.com.br) and the Chicago Mercantile Exchange (www.cmegroup.com). “CME got to invest in Bovespa and vice-versa, Bovespa got to invest in CME. We thought that demutualization process is extremely successful, so it’s one of the models we’re looking at,” she said. However, the SEC is also considering involving other exchanges and noted that the NSE’s technology needs to be updated.
She said the SEC will be tough against fraud and cases of insider trading and share-price manipulation, factors which are seen to have caused the bubble and the ensuing fall in the Nigerian stock market last year: “As a regulator, we have zero tolerance for anything that is improper.”
According to Leadership, data from market-data provider Factset shows the Nigerian All-Share Index fell 70% from a high of 66,371.2 in March 2008 to a low of 19803.6 in March 2009. This year the index has climbed from around 20,000 as far at 28,029 in April, but on 7 September closed at 23,957.
Ms. Oteh said she expects more asset classes to be traded in Nigeria and hopes for a vibrant fixed-income market. The Government has reportedly removed a tax difference which favoured sovereign bonds over corporate bonds. “Other products that we hope to focus on our exchange are exchange-traded funds and Islamic funds, given that our country is at least 50% Islamic.”
She is also expecting more domestic and foreign companies to list on the NSE: “We have a petroleum industry bill that will go through the National Assembly very soon. We expect that to create an opportunity for the national petroleum company to list as part of joint ventures with Shell, Mobil or other international oil companies on the exchange,” she said.
“There is an initiative to encourage telecommunications companies to list in the market. So we can see companies like MTN, which makes 40% of their worldwide profits in Nigeria, potentially having an opportunity to list on the market. We can see companies like Bharti, which has acquired assets across Africa, to look at also listing on the market.”
The NSE Council is also investigating closing 5 out of 11 regional branches of the NSE in order to slash costs due to lower trading values. Reportedly the Council recently sacked 95 of the senior staff.
The six remaining branches would reflect the geo-political zones of the country. According to reports, some of the branches were opened more for political reasons, said a source: “In most cases the state governments built the structures and handed them over to the Stock Exchange to manage with the Exchange bearing the cost of running those branches. Unfortunately, virtually all of the branches turned out to be shadows in trading activities.”
The NSE has its trading floor in Lagos, but each branch also has an automated trading floor.
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.