Obaze’s removal may send negative signals to global investment community -stakeholders
The recent removal of Mr. Jim Obaze, Executive Secretary of the Financial Reporting Council of Nigeria (FRC) has been described by a cross section of Nigerians as a development that would further weaken Nigerian position in the global ranking of ease of doing business and competitiveness.
Mr. Lambert Andorin, the Managing director of Highland Securities Limited, who spoke to Daily Times said that the move would further weaken the country’s effort to court foreign investors.
He said that it was believed that FRC under Obaze was charged with enforcement of rules and regulations set up by the federal government to bring sanity to the way of doing business.
The rules, he said, also regulate activities and corporate governance structures of business and charitable organisations.
He argued that if a government official in Nigeria would be sacked for enforcing rules of the government, it leaves more to be desired and sends wrong signals to people
“We need to know why they sacked him; if there is an offence he has committed. It is just like you telling the Inspector General of police not to arrest a thief and you know that there is a law which says that any person that steals must be arrested. If that law has not been changed and the government asks the Inspector General not to obey that law, will l obey the government or the law?
Andorin further posited that if the law in Nigeria must be respected, the ousting of Obaze by the supervising minister must not be respected over the law of the land hence FRC operates on the mandate of the national assembly.
He said that the laws establishing FRC gave the body the mandate to enforce governance rules and regulations of corporate organisation and none government organisations and if the directive to oust Obaze came from a minister of the federal republic, it could be interpreted that the minister is obstructing the course of justice.
“Obstructing the flow of law which I believe is not the proper thing to do, except if there is any offence Obaze has committed” he said.
He maintained that if the FRC boss has been sacked for the purpose of enforcing the law of the country, such action would not be seen to be backed by law.
He recalled that in the recent past, the federal government of Nigeria tried to remove the governor of Central bank, but the issue became contentious, and the CBN governor then was said to have embarked on terminal leave, adding that issues are procedural and based on the rule of law.
The foreign investors and the local investors, Andorin said, would react negatively to the development, with the belief that the government in the country bends the law at their whims and caprices and that the law may not protect any of their investments here.
Meanwhile, Managing Director Cowry Securities Limited, Mrs. Nkoli Edoka, told Daily Times of Nigeria in an interview that the removal of Jim Obaze as executive secretary of FRC may not have diverse negative impact hence structures have been laid by him.
“I Don’t think that his removal will impact the capital market negatively, the listed companies are complying with FRC provisions or codes, and it is either that his successor tightens the policy stand on the FRC codes or that it would remain the same, either way, it is still for the benefit of the market,” she said.
She said that hence the capital market operators in complying with FRC codes ensure financial statements of companies comply with International Financial Reporting standard (IFRS) by conforming to the FRC codes.
He said that the market was getting used to Obaze before his removal, and it is expected that his successor would tow his line.
“But we don’t know the capacity of the incoming secretary of the FRC, he could even be better and we are not going to be worse off because we are already in the track of conforming to corporate governance provisions.”
She said that corporate governance structures established by the FRC under Obaze put the entire market on the track through the establishment of corporate governance structures which could not be reversed.
