A finance expert has said that the fraud allegations, which the Securities and Exchange Commission (SEC) levelled against some staff of the Nigerian Stock Exchange (NSE) and its 25 council members, demand more explanations.

Femi Awoyemi, the chief executive officer of Proshare Nigeria Limited, an investment advisory firm, said the SEC’s statement raised some salient questions which should be tackled.

“The press release raised some salient questions which suggested a rushed response to a matter one would have otherwise considered under their (SEC) control,” Mr. Awoyemi said.

He said that one of the salient questions include the fact that the Exchange Commission said “the accrued sum of N1.2 billion was distributed to employees and council members as bonuses and share of surplus respectively in the current year. It then went on to provide a list, setting forth payments to 25 members of the Council from 2006 to 2008. But the list showed a total payment of N1.380 billion, as against the N1.2 billion claimed.”

Meanwhile, Hauwa Audu, one of the accused council members for the financial years of 2005 to 2008, has questioned both the intent and appropriateness of the SEC publication.

Mrs. Audu, chief executive officer of Amyn Investment Limited, a stock broking firm, said she is “convinced that a line must be drawn between those for whom the SEC intends to hold accountable for actions considered as infractions; and those who received monies to aid the performance of their fiduciary duties as council members.”

Mrs. Audu, in a statement, posted on Proshare website, said, “I, Hauwa Audu, never partook in the alleged sharing of surpluses at the NSE. The money given and received was specific as to the purpose each time - to undertake global travel to stock exchange events globally in the year to acquaint myself with developments in the market in order to be able to contribute effectively as a council member.”

The fraud

The SEC, in a statement on Wednesday, signed by Lanre Oloyi, head of media, said the fraud, which was perpetuated between 2006 and 2008, was discovered in the NSE 2009 audited financial statements.

The statement explained that the NSE Council recently approved the audited accounts of the Exchange for 2009, and as mandated by the Investment and Securities Act, the interim administrator of the NSE, Emmanuel Ikazoboh, submitted the approved accounts to the SEC, from which the discovery was made.

The SEC said the accounts, which were audited by the NSE’s External Auditors, Messrs Akintola Williams Deloitte, showed that “accrued sum of N1.2 billion was distributed to employees and council members as bonuses and share of surplus in the current year.

“This is contrary 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 be applied solely towards the promotion of the objects of the Exchange, and no portion thereof shall be paid or transferred directly or indirectly by way of dividend, bonus or otherwise,” it said.

The statement said that SEC had directed Mr. Ikazoboh to recover all the shared bonuses from the council members. However, it added that Aliko Dangote, one of the beneficiaries, had returned N40 million, being his own share of the distributed surpluses.