Last two weeks I had written a simple article on the little thing I noticed that was about to happen at the so-called’ new improved stock exchange’.
I had talked about the spurious staff share scheme that was being pushed by a Board which in my estimation was not totally representative of the new Shareholding structure of the Exchange. I had pleaded that the idea should be at least for now shelved till a new Board was reconstituted and due process laid on firm principles of internationally accepted Corporate Governance was used to pilot the scheme.
Furthermore, I had stated very categorically that I had nothing against the Share staff scheme especially if it would serve as a carrot to attract bright minds into the system especially as the system had been imbued with the stuffiness that comes with a lethargic red tape principled on a personality cult which crippled creativity.
The arbitrariness of the decision, its lack of standing especially if you looked at the valuation or lack of it thereof being used threw up a red flag that seemed to say that it will be business as usual at the Exchange as it struggled to climb back into relevance.
As expected, the article was widely circulated and was discussed in hush tones within the Capital market community. I got a lot of feedback although on the grounds of anonymity which strengthened my resolve to keep watching and shout again if things were not done right.
I also got engaged by some elements within the system who assured me that the issue would be discussed at the AGM and everything would be fine.
My people, everything is not ok o. The Exchange had not only gone ahead to implement the policy it has even gone further to retain the Board that was lacking in true representation of its new ownership and as such lacking the legitimacy it requires to carry out far-reaching reforms needed at this time
The market has reacted expectedly. The share price of the entity is on a downward spiral. It dropped from N30 to N13.5 at the time of writing. A drop of more than 100%.
Let me quote a report I have just seen, ‘the board has successfully betrayed the principle of value creation for shareholders by the ripple effect of its ‘generous’ allocation of shares to the staff share plan. This is inevitable since the Board created a backdated share plan with no clear communication to shareholders on how the envisaged plan will work’.
The report concluded by saying that, ‘the fact that the composition of the Board is not reflective of shareholder interest makes one wonder if the Board is really acting in the interest of the shareholders or in its own interest.’
Let me tell you my real angst. My issue is the fact that as we continue to wallow in one of the most serious economic doldrums this nation has faced with the Naira hemorrhaging and all other economic indicators pointing south, the leadership of the Exchange which is supposed to be a very pivotal tool in the fight to restore our economic sanity are engaging themselves in this macabre dance in the rain.
The Exchange has lost steam. It has fallen from its heydays and is in my own estimation no longer a major player in the scheme of things.
They know this, the market knows this and the economy knows this. In trying to resurface, they have gone on a rebranding mission. They have changed their name and have given themselves a name that is closer to a Marvel Comic book character than that of a serious economic institution.
Furthermore, they have designed a suffocating structure begging to be understood that mirrors the holding company structure of our banks. They have seen the sit-tight nature of some of our titans who instead of gracefully retiring just move upstairs to ‘holdco’ and keep pulling the strings from there. That one is good, they are providing value to the system and the economy.
Dare I ask, what value is a Holdco structure at the Exchange. Please what is Oscar Onyeama doing at the Holdco.? I need to be better educated.
Why move to Holdco after a 10year tenor for another 5 years? Are we expecting a race to the moon by the exchange alongside Richard Branson that only Mr. Onyema can superintend?
These people should better start taking themselves very seriously and do the right thing which is to ensure very far-reaching and constructive reforms at the Exchange. Reforms would better position them as a major economic driver because what we are seeing now leaves a lot to be desired.