Dangote should resign

Dangote should resign as vice chairman of the Nigerian Stock Exchange (NSE). The rivalry between Nigeria`s richest duo, Aliko Dangote and Femi Otedola has taken a turn for the worse. Dangote should resign his post as vice chairman of the Nigerian Stock Exchange (NSE) over perceived conflict of interests in the unfolding financial saga that has seen the SEC suspend and fined Nova Finances Securities owned by Eugene Anenih, a Dangote proxy.

The SEC suspended Nova Finance Securities last Thursday March 26, 2009 after investigations uncovered unethical practices. The SEC investigation, Huhuonline learnt, triggered off another investigation into Afribank Registrars; accused of aiding and abetting the unethical practices by Nova Finance Securities. Sources within Afribank Registrars – who are registrar to AP plc – told Huhuonline that the SEC’S complaint rests on the failure of Afribank Registrars’ internal control mechanism to detect or prevent the dubious transactions by Nova Finance Securities and that its records were falsified to cover up the illegal transactions.

Aliko Dangote

The suspension and fine of Nova Finances & Securities may not be evidence of the guilt of Afribank Registrars but it provides the clearest evidence of the complicity of the group of Dangote consortium partners in masterminding the fraud. After several months of denial, the suspension of Nova Finances is a very sad illustration of the way business is done in Nigeria and the mindless audacity of some people in authority like Dangote who remains vice-president of the Nigerian Stock Exchange. (NSE)

As pressure continues to mount, the race to succeed the embattled Dangote by those who believe-or perhaps know-that he be will axed, should he fail to resign, may have begun in earnest. And a few names have been touted. But, curiously, Dangote is yet to sever all his ties to Nova. CSCS document made available to revealed that during the period under review, Dangote and Nova with the assistance of Afribank Registrars fraudulently swapped a total volume of five hundred thousand units of irredeemable non-cumulative convertible preference shares in ten different transactions, which were admitted to the daily official lost of the Nigerian Stock Exchange. The ensuing panic and loss of share value created a scary scenario for AP investors.

The resultant effect was shareholders lost of confidence in AP shares, leading to a massive exodus of existing shareholders, who hurriedly offloaded their AP shares and precipitating a sharp decline in its price. Some of the former AP investors, who spoke to, said “they just wanted to get out of the investment, and had no regard for the price at which they sold”.

Despite the fine and suspension of Nova Finance Securities, and the SEC’s threat to sanction operators caught on unethical practices especially, on insider and cross-share trading, it appears the warning is not being taken seriously as practitioners are engaged in premium price war in an attempt to edge out competitors. “Nova and Aliko were just crossing shares between themselves, there were no money exchanged; rather they were even loosing money by paying commissions for the swaps”, the chief executive of an investment firm told, adding: “the practice of cross-share trading is a common tactic within the industry.

The SEC should not merely issue threats and small fines; it has the facts and profiles of all operators to ban or impose huge sanctions on those companies that are involved in these unorthodox practices but it has failed to do so.” The growing calls for his resignation from the NSE came hard on the heels of another unsavory development in the unfolding saga.

The latest salvo involves a text message, currently making the rounds, and said to have been originated by Otedola. The text message, featuring the names of some married women who had allegedly engaged in extra-marital affairs with Dangote, was described by one source as Dangote’s “black box”. It contains information whose potential impact might cause considerable embarrassment to Dangote and some of his political allies, a source told Dangote’s proxies have accused Otedola of employing blackmail and other crude underhand tactics to punch below the belt. But Otedola’s supporters have denied any involvement 

with additional reports from HUHUONLINE