The SEC DG controversy

RECENTLY, the Minister of Finance, Mrs. Kemi Adeosun, ordered the suspension of the Director General of the Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo. The allegations levelled against Gwarzo by the ministry included paying himself the sum of N104.8 million after being elevated from the post of Executive Commissioner to DG of SEC, even when he was yet to complete his tenure in the previous position. Other allegations bordered on fraudulent collection of money from the commission using the monetisation of cars as a façade, as well as using fronts to collect contracts running into several millions of naira from the commission. This allegedly benefited Gwarzo, his cronies and members of his family. An administrative panel of inquiry was immediately constituted to look into the allegations, while an acting DG was appointed in the interim.

In his reaction, Gwarzo alleged that the minister was on his trail because he had refused to carry out a verbal directive from her to discontinue investigation into the suspension of Oando Plc in the recent controversy over shares. It will be recalled that SEC had recently queried Oando Plc over allegations that it was embroiled in unwholesome operations in the Nigerian securities market. It demanded that a thorough forensic audit be conducted into the company’s operations. In a recent reaction signed by her Special Adviser, Mr. Oluyinka Akintunde, however, Mrs. Adeosun averred that Gwarzo was merely attempting to blackmail her, as the issues in contention were straightforward and unambiguous.

According to the minister, the decision taken by SEC on October 20 to suspend the shares of Oando Plc and conduct a forensic audit of its operation was actually approved and endorsed by her ministry. She added that the SEC team led by Gwarzo himself had made a strong case of complicity against Oando and presented adequate evidence to her which clearly showed that it had a case to answer. Indeed, according to the release, investigations into Oando’s activities, undertaken by SEC in the discharge of its statutory functions, were ongoing, and forensic auditors had resumed at Oando. The minister’s statement was aimed at denouncing Gwarzo’s insinuations of an instruction to discontinue with the Oando case.

A natural question that arose from the suspension of the erstwhile SEC DG concerned its timing. Why did the ministry suddenly realise that Gwarzo was embroiled in corruption allegations? Why was he not queried before the Oando issue surfaced? In the said response by the minister, she also addressed this timing issue. According to her, Gwarzo was queried by the ministry on November 3 and he responded on November 7. She stated that his response was deemed unsatisfactory and that the ministry ordered further investigations. The release further stated that Gwarzo’s suspension was in line with the Public Service Rules (PSRs) which provided for the unhindered investigation of serious allegations of financial impropriety against any suspected public official. The minister also said that credible reports showed that documents were being unlawfully removed from SEC that could tamper with the administrative panel’s investigation.

We are of the opinion that even though an accused person is presumed innocent until proven guilty of the allegations against him or her, those levelled against Gwarzo are too grave to be ignored by any responsible administration. The administrative panel set up by the minister to look into the veracity or otherwise of the claims against the SEC DG is therefore in order. Based on the possibility that an officer being accused of violation of official moral codes could tamper with material evidence if retained in office in the course of investigations, it is appropriate to ask the accused officer to vacate his seat to allow for a thorough and unbiased investigation. The panel set up by the minister should clarify whether the former SEC DG contravened the Code of Conduct for Public Officers set out in the constitution, the Independent Corrupt Practices and Other Related Offences Act and the Penalty Code. This should not prove too difficult. Since the companies allegedly used to perpetrate acts of corruption are presumably registered with the Corporate Affairs Commission (CAC), the panel should have no trouble verifying the claims.

We, however, enjoin the panel to conduct a thorough and unbiased investigation in the spirit of equity and good conscience. We agree with the minister that the integrity of the capital market is crucial in the calculus of economic growth and that its management must be conducted in an orderly and transparent manner so as to ensure investors’ confidence. The moment the leadership of the capital market which is expected to maintain the highest standards of integrity is stained through real or imagined allegations, the economy is in serious trouble.