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Alleged corruption: Suspension of SEC DG divides shareholders

…Demand sack of Oando management

By Samuel Ibiyemi

The suspension of the Director General of the Securities & Exchange Commission ( SEC) Mr. Mounir H. Gwarzo  to allow for an unhindered investigation of several allegations of financial impropriety has created division among various groups of shareholders on the floor of Nigerian Stock Exchange ( NSE). While a group of shareholders under the umbrella of Constance Shareholders Association of Nigeria commended the Federal Ministry of Finance for the suspension another group under the aegis of Trusted Shareholders Association of Nigeria described the suspension  of SEC DG as a strategy  by the Federal Government to protect management of  Oando Plc from being punished by SEC  for mismanaging assets of Shareholders.

This is following dismissal  on Monday November 27 by a Judge of an High in a case instituted against SEC  by the management of Oando Plc.

The Honourable Minister of Finance, Mrs. Kemi Adeosun, has suspended the Director-General of the Securities and Exchange Commission (SEC), Mr. Mounir H. Gwarzo, from Office, to allow for an unhindered investigation of several allegations of financial impropriety leveled against the Director-General.

The Deputy Director (Press ), Federal Ministry of Finance Patricia Deworitshe in a press statement yesterday announced the  suspension of the DG SEC Mounir H. Gwarzo from office by the Honourable Minister of Finance, Mrs Kemi Adeosun to allow for an unhindered investigation of several allegations of financial impropriety leveled against him. The suspension according to the statement is in line with the Public Service Rules (PSRs) 03405 and 03406.

Deworitshe noted that the  Honourable Minister has set up an Administrative Panel of Inquiry (API) to investigate and determine the culpability of the Director-General.

According to her the Finance Minister has also directed the suspended SEC Director-General to immediately handover to the most senior officer at the Commission, pending the conclusion of investigation by the API.

Also suspended are two management staff of the Commission – Mr. Abdulsalam Naif Habu, Head of Media Division and Mrs. Anastasia Omozele Braimoh, Head of Legal Department – who have been alleged to engage in financial impropriety in the Commission.

In  reaction to the sack, President Constance Shareholders Association of Nigeria National  President, Shehu Mallam Mikail said that the action on DG of SEC is a welcome development. This, he  said shows that the government is ready to fight corruption. “ We believe that this will serve as a lesson to others that a proper transparency and accountability should be adhered to in whatever position you may find yourself.

Mikail noted that this action cannot affect the market. This, according to him is because there are laid down rules that govern the market.  ” It will give and build more confidence in capital market transactions,” he said.

He added: “ You have to be transparent and also adhere to rules of good corporate governance. The staff and officers of SEC are up to the task of the daily activities of the agency and the suspension cannot deter the activities of SEC.

“ The action would serve as a lesson to others, moreover, the suspended DG Mr Gwarzo has never believe in shareholders.

However, President Trusted Shareholders Association of Nigeria Alhaji Muktar Muktar described the suspension as a setback for the anti-corruption fight by the administration of President Muhammadu Buhari. He lamented  that the suspension is not appropriate following petitions  by shareholders submitted to the National Assembly over mismanagement of shareholders’ assets by the management of Oando Plc led by the Group Executive Officer Mr Wale Tinubu. “ According to the auditors report for 2016, the liability of Oando Plc is greater than the assets with over N270 billion. With this liability, it is clear that the company as a group cannot continue to operate profitably which calls for concern by Shareholders. Based on the allegations by shareholders,the annual financial accounts supposed not to be passed at the Annual General Meeting ( AGM) but it was passed,” he lamented.

Muktar explained that in protest to the passage of Oando’s financial results for 2016, shareholders  sent petitions to the  National Assembly and the SEC with a request for the replacement of Oando’s management. Based on the concern,  he explained that trading on shares of Oando Plc was suspended by SEC on the floor of the Nigerian Stock Exchange ( NSE) and  set up forensic audit on the accounts of Oando Plc

“In protest against the action of the shareholders, management of Oando Plc sued SEC but the case was dismissed by court on Monday November 27,2017. Hence, shareholders are disturbed about the suspension of the  SEC DG on allegations of collecting N104 million severance package approved by the SEC Act compared with billions of Naira lost by shareholders to mismanagement  by management of Oando Plc,” he noted.

Muktar alleged that the DG of SEC was suspended so that SEC will not be able to sanction Oando Plc. He expressed regret that the suspension of SEC DG is making Nigeria to look like Banana Republic.” Why can’t the government  suspend Oando management and then put set up  a proper panel  of auditors to investigate accounts of Oando Plc,” he argued.

He insisted  that the suspension of SEC DG was designed to protect the management of Oando Plc  in high trading on its shares have been suspended.

To check excesses by officials of the federal government, Muktar disclosed that the association is mobilizing supporters to protest the sack of SEC DG by the Minister of Finance at the National Assembly. “The suspension is really going to worsen investors confidence. “ I am disappointed with the administration of President Buhari with this suspension action of SEC. The position of the opposition party is gradually coming into light,” he said.

He added: “In fact the Finance Minister should step down or be sacked immediately”.

Another President of Shareholders association  disclosed that the  DG of SEC DID NOT Commit any offense  for collection of N104 million severance package.  He said that the embattled DG collected the money based on the recommendation of the Investment  and Securities Act. The ACT empowered the board of the commission to set remuneration for employees which also enables employees to collect severance package. The ACT also allows Commissioner to collect severance package after two years of service.

“ We are surprised that the government decided to single out the SEC DG as a scape goat while another director of SEC appointed as a Minister collected the severance package,” he said.

He explained that the embattled SEC DG was not promoted into the position of DG  from commissioner since he was screened by the National Assembly. He noted that other three directors appointed at the same time and completed the two years tenure collected their severance package.

Meanwhile, certain reports cited the case of the recent over N10billion scandal, relating to diversion and misappropriation of funds by Partnership Securities Limited (PSL), and its sister companies – Partnership Investment Company Plc; Life Care Partners Limited; and SBDC Microfinance Bank Limited, where over 300 investors of Partnership Investment whose stocks worth N4.8billion were involved in a ‘shady’ deal.

According to him, there was need for the market to go through proper sanitisation process to get rid of the ‘bad eggs’ in the market and boost retail investors’ confidence.

“All these will affect the market; even the regulator is being accused. The market needs a general clean-up to get rid of all these fraudsters; it was not like this before. Nobody is buying shares because many people are broke.”

Gwarzo has been accused of paying himself severance package worth N104 million. The SEC boss, allegedly received a severance package amounting to the tune of N104million, when he became DG in 2015 .Gwarzo reportedly requested for the money as severance package for his previous position as commissioner, despite opposition from the head of the SEC’s legal department.

The SEC DG was further accused of violating the rules guiding the SEC, by awarding contracts to his family and friends in a petition submitted  to the House of Representatives, over the alleged fraudulent activities.

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