By Chinwendu Obienyi
Chairman, Trusted Shareholders’ Association of Nigeria (TSAN), Alhaji Mukhtar Mukhtar, has urged Nigeria’s capital market regulators to wield the big stick on defaulting companies to protect the integrity of the market and ensure its sustained growth.
Speaking on the controversy involving Oando Plc and its shareholders during an interview with Daily Sun, Alhaji Mukhtar said that with the audit report by Ernst&Young, regulators ought to have sacked and prosecuted the company executives to facilitate a forensic audit of the board and management and to serve as deterrent to other defaulting companies.
“Following the scrutiny on Oando carried out by Ernst&Young showing that the liabilities of the company have surpassed its total asset by almost N260 billion, it is a clear fact that there are serious issues surrounding the company.
“In other countries, the regulators would have sacked the board of such defaulting company because if there are evidences or signs of infractions in any company, what you do is sack that management as former Central Bank of Nigeria (CBN) governor, Lamido Sanusi, did in the banking industry. How can you institute a forensic audit in all sense of fairness without sacking that management? That is why I say regulators are not serious,” he said.
Mukhtar, however, warned that following regulators’ soft stance on the company’s issue, local and foreign investors might be scared or discouraged to invest in the Nigerian capital market.
His words: “Several protests by different shareholders that trail Oando Plc is a sign that people are losing confidence in the regulators and company because if the regulators are not doing what is expected of them, then we are pushing away both local and foreign investors. This is why Nigerian companies cannot compete favourably with their foreign counterparts.”
On the way forward, the TSAN Chairman admonished regulators to be firm when handling cases of infractions and discrepancies because the capital market thrives on integrity.
“Regulators have to be strict anywhere they see infractions; they have to sack that management, institute an interim management and then prosecute them because if you don’t prosecute them, it is not good for the system as it will discourage foreign investors,” Mukhtar said.