NSE appoints inaugural board to oversee post-demutualisation
•Okereke-Onyiuke , others okay exercise, say decision will attract new investments
The council of the Nigerian Stock Exchange (NSE) yesterday appointed the inaugural board that would oversee the affairs of the exchange post-demutualisation, to become Nigerian Exchange Group (NEG) PLC.
This follows a successful court-ordered meeting and Extra-ordinary General Meeting (EGM) held in Lagos yesterday, where members of the exchange unanimously voted 100 per cent in favour of the appointment of the initial directors of the Group.
The appointed directors are: Abimbola Ogunbanjo, Chairman and Non-Executive Director; Oscar Onyema, Chief Executive Officer and Managing Director; Dr. Umaru Kwairanga – Member and Non-Executive Director, and Fatimah Bintah Bello-Ismail – Member and Non-Executive Director, among others.
Speaking at the event, Ogunbanjo, who is the President of the council, said the national council had also proposed a transition arrangement for the inaugural board of directors to be implemented immediately upon demutualisation and the re-registration of the exchange as a public limited liability company.
He said for the purpose of maintaining continuity and preserving the Exchange’s collective knowledge and learned experiences, as well as retaining stakeholders’ confidence and market stability, the board composition, post demutualisation would comprise individuals that have been selected from the current members of the national council as well as recently nominated independent directors.
According to him, the members of the national council retained afterwards would serve for a period of 18 months post-demutualisation.Ogunbanjo pointed out that on expiration of the period, the composition of the board will evolve in line with existing rules and regulation, market standards, competitive realities and succession planning policies.
“I feel elated that 19 years after initiating the process to demutualize and on the 60th anniversary of the Exchange, we are close to achieving the goal.The successful demutualisation of the Exchange was one of my main objectives when I assumed the Presidency of the Exchange. I am particularly happy it has been achieved during the lifetime of one of its founding fathers, Pa Akintola Williams.
“In telling the story of how we have achieved this milestone, we recognize the efforts of several actors involved in this project – including the management and staff of the Exchange, our members, professional advisers, the Federal government of Nigeria, the Securities and Exchange Commission (SEC) and other capital market stakeholders without whom it could not have become a reality.”
Recall that the dealing and ordinary members of the exchange had on March 30, 2017, passed a reolution, authorising the National council of the exchange to commence the demutualisation process.
This was followed by the signing of the Demutualisation of The Nigerian Stock Exchange Bill into law in August 2018. In December 2019, the Securities and Exchange Commission of Nigeria (SEC) in a No Objection letter gave its consent to the NSE to hold the COM and EGM that would facilitate its conversion from a not-for-profit entity limited by guarantee into a profit-making, public limited liability company owned by shareholders.
Reacting on the development, the former Director General of the Nigerian Stock Exchange, Ndi Okereke-Onyiuke said the demutuualisation exercise would unlock new opportunities and attract more foreign investment for the exchange.
Additionally, she said the exchange would have access to fund that would enable it execute capital projects without dependent on the government aid.“It is good, not only for stockbrokers and investors but for the Nigerians as a whole. It is good to have a demutualised exchange in Nigeria. I feel that people has come to understand what the stock exchange is all about.
“With this demutualisation, a lot of people will come into the exchange since we have already gone through the process of teaching Nigerians how to be shareholders in quoted companies. I want to advice them to see the NSE now as a quoted company, it will have to behave like a father, and the exchange must maintain the rules and obey the rules.
“The exchange can attract further highly experienced staff, foreign investors now and foreign stockbroking firms. This is because the exchange is now opened up to the world. With this demutualisation, anybody in any part of the world can have access to stock market activities.
“The exchange will have a lot of money to execute high level plans and people that will invest in the exchange will also make money. It is the best thing that will happen to the Nigerian economy. It will definitely move the country forward because it is the engine room of the economy.”
To avoid government taking a controlling stake on the exchange, Okereke- Onyiuke said the exchange would limit government’s investment to 10 per cent, noting that government is not trained to create wealth.
“People in government are not trained to create wealth; the operators are trained to create wealth not to spend it. Government can invest in stock exchange but we will limit the investment, no government can take more than 10 per cent because if government takes anything close to 20 per cent, they will start controlling it, making it look like government company and it will never happen,” she said.
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