Capital Market Probe Report Lists 17 Reasons Why the Capital Markets Collapsed
The report released by the Capital Market Probe Committee of the House of Representatives lists seventeen major reasons of the collapse of the capital markets.
Some of the reasons are straightforward and follow a specific and measurable timeline of events that could be easily linked to the collapse such as the banking sector consolidation of 2004 and 2005.
However some of the reasons given are a bit opaque and may have occurred after the capital markets collapsed, such as the acquisition of Intercontinental Bank by Access Bank.
The following is the entire list of reasons provided by the House Committee:
- The sum of N8Billion missing from Union Bank Pic public offer of 2005;
- Nationalization of some Banks without due process;
- Banking sector consolidation of 2004/2005;
- Unbecoming activities and market infractions of some capital market operators;
- poor regulation of foreign port folio investors thereby precipitating capital flight;
- high cost of doing business in the capital market;
- contradictory monetary policy of the CBN;
- absence of product variety and low level of new listing thereby hampering dept and liquidity of the capital market;
- conflict of interest and misconduct of the current leadership of SEC, thereby fettering its regulatory capacity;
- loss of credibility of the entire SEC management team, led by the DG, Arunma Oteh;
- Regulatory failure of SEC and CBN;
- incompetence and lack of statutory qualification by the current DG, SEC, Ms Arunma Oteh ;
- unguarded utterances by key financial system’s regulators; AMCON’s activities that constitute a time bomb and potential disaster in waiting in that there is doubtful process of Non Performing loans.
- (NPLS) valuation, inadequate liquidity and capital base, AMCON’s involvement of one of its regulators, SEC, in its Board contrary to Section 10, AMCON Act, non-accountability of AMCON to any authority; layers of moral .
- hazards in SEC and diversion and issue of bonds for debt re-financing;
- irregular acquisition of Intercontinental Bank Plc by Access Bank Plc;
- irregular acquisition by AMCON of the performing loans of SEAWOLF and GEOMETRICS Company etc.