…As allegations of N104m, other abuses against SEC boss hang
From Uche Usim, Abuja
the long silence and failure of the management of the Securities and Exchange Commission (SEC) to exhaustively respond to the avalanche of scathing allegations levelled against its Director General, Mournir Gwarzo, has left stakeholders wondering whether indeed his as guilty as alleged.
When the allegations first hit the airwaves on August 26, 2017, SEC spokesman, Naif Abdussalam, shocked the public by admitting that the management had been aware of the allegations of Gwarzo paying self severance benefit of N104 million for the two and half years he served as as Executive Commissioner, and was also picking the flight bills of law makers to curry their favour in addition to awarding contracts to his companies.
The three aforementioned official breaches, as alleged, run foul to the Acts and Rules of SEC, that preaches transparency, accountability and probity, being the capital market regulator.
Expectedly, tongues are now wagging as to why the Commission chose to keep mute for several months, instead of coming out boldly to clear the name of its DG with indisputable facts, if indeed the allegations are baseless as the management claims.
Already, capital market experts and other industry stakeholders are beginning to interpret the long silence of the SEC boss as one very dangerous, signal for the Nigerian Capital Market, considering that the Commission, as the police of a vital and sensitive sub-sector like the capital market, should be above board in all its dealings as anything short of that will not only erode the confidence of investors, but also hurt the economy.
Internally, some staff have also alleged that Gwarzo runs SEC like a mafia lord as he often travels outside the country without properly handing over powers to the most senior director but rather, his personal assistant runs his office.
For instance, the SEC boss flew to London on August 31 to attend a meeting with GMEX Group, United Kingdom, a specialist firm in commodities exchange development.
In an internal memo dated October 30 to Directors and Heads of Departments (HODs) that was sighted by Daily Sun, Gwarzo did not hand over to any senior Director or any high-ranked official of SEC for that matter, as it is the usual civil service practice.
That action has now fuelled suspicion that he may have some skeletons in his cupboard because in his absence, an Acting DG, with full powers should run the coveted office.
Gwarzo, in the said memo told his subordinates to reach him through his GSM or email for any official matters, meaning that no one can take any decision (even in an emergency situation) until he is reached via phone or email.
“You can also contact my Special Assistant (Daiyabu Umar), who will be in the office throughout the period on any other issue”, he said in the memo.
More so, Gwarzo, upon his return to Nigeria will not be in the office for about 10 days as the memo indicated that he would be in Lagos from November 6-17 attending various meetings including 2018 budget seminar, registration meeting, among others.
A staff who craved anonymity said; “where is it done that a Personal Assistant will run the office of the CEO? Where have all the Senior Directors gone to? So, if he is on a long flight and an important decision is to be taken, the entire Commission will wait for him or report to his PA? Does he (PA) have such powers? This is a flagrant abuse of office. Only someone with skeletons in his cupboard will do this and I like what the media is doing to expose these things”, he said.
Gwarzo’s journey to crisis began when former President Goodluck Jonathan appointed him SEC DG on May 22, 2015. Prior to that time, he was an Executive Commissioner.
Having assumed office as DG/CEO, one of the first assignments he allegedly undertook was to hurriedly pay himself a severance package of N104 million as SEC Executive Commissioner, a position he occupied for two and half years before his ascension to the headship of the Commission.
However, the development did not go down well with the internal public of SEC.
Consequently, a flurry of petitions flooded the House of Representatives after stiff opposition mounted by the acting head of SEC’s Legal Department, Frana Chuwuogo, failed.
A document on one of the petitions states:
“On assumption of office as the DG of the Commission, Mr. Gwarzo immediately requested that the sum of N104,851,154.94 (One Hundred and Four Million, Eight Hundred and Fifty-One Thousand, One Hundred and Fifty-Four Naira and Ninety-Four Kobo), be paid to him as severance package for the cessation of his appointment as Executive Commissioner of the Commission.
“The requested severance package in the sum of N104,851,154.94 (One Hundred and Four Million, Eight Hundred and Fifty-One Thousand, One Hundred and Fifty-Four Naira and Ninety-Four Kobo), was paid by the Commission into Mr. Gwarzo’s bank account, held with Guaranty Trust Bank Plc, with account number 0023868895.
“Mr. Gwarzo received the above stated payment of a severance package in total disregard of the opinion of Mr. Frana Chukwuogo, the Acting Head of the Commission’s Legal Department, who clearly stated, in accordance with best practices, that a severance payment can only be paid to an employee of the Commission who has concluded his or her service and has completely disengaged from the Commission and not to an employee who has been promoted within the Commission and has not severed his employment with the Commission.”
Beside the above hefty allegation, the petition said the SEC DG had been awarding contracts to his family members and friends, in violation of the rules guiding the Commission.
It said Gwarzo, his family members and certain directors of the Commission were shareholders and directors in companies “used to carry out the alleged illegal transactions”.
Details of the “illegality” were stated, with at least four different accounts said to be traced to him.
“Mr. Gwarzo and two of his relatives are Directors of Outbound Investment Ltd. (the Company). Since Mr. Gwarzo assumed office as DG of the Commission, the Company has been the sole supplier of diesel to the Commission,” the petition read.
“The Company has also supplied air conditioners to the Lagos Zonal office of the Commission, as well as supplied fridges to the Commission.
“Payments made by the Commission to the Company for contracts executed can be verified from the firm’s bank account held with United Bank for Africa Plc, with account number 1016723428.
“In addition, the Company has executed more contracts for the Commission which are not listed in Appendix B1, however these contracts can be verified from the Commission’s accounting records.
“Mr. Gwarzo even as the DG of the Commission is a Director of Medusa Investments Limited (the Company). The only other Director of the Company is Khadija Mustapher, who is also the wife of the DG of the Commission.
“The Company has actively been used by Mr. Gwarzo, as a shell to carry out alleged illegal transactions as is verifiable from the frequent transactions carried out through the Company’s bank account held with Guaranty Trust Bank Plc, with Account Number 0023953920. Mr. Gwarzo is a signatory to the said Company account.
“Mr. Haris Haliru Gwarzo, the younger brother of the DG is said to be the Sole proprietor of Northwind Environmental Services (the Company). The Company has been engaged by the Commission to clean the Commission’s Kano Zonal Office, since the inception of Mr. Gwarzo’s tenure as the DG of SEC.
“Payments made by the Commission to the Company for contracts executed, can be verified from the Company’s bank account with Diamond Bank Plc, with Account Number 0095179297.”
Five other companies allegedly used for personal gains were listed by the petitioner.
That was just a chapter of many allegations levelled against Gwarzo.
In another development, the SEC boss and some Directors were also fingered in a series of transactions that put the integrity of the Commission to question.
One of such is the allegation that SEC, under Gwarzo, has been footing the flight bills of some law makers on trips out of Abuja even when the journey had no bearing on SEC’s operations.
For instance, on September 12, 2017, SEC DG allegedly approved a British Airways business class ticket for Foster Ogala, Deputy Chairman, Senate Committee on Capital Market to attend IOSCO Growth and Emerging Markets Committee Meeting and Annual Conference in Colombo, Sri Lanka.
A source said: “This is in flagrant disregard of the new government policy on travelling by economy class. Also, why does SEC have to buy tickets for Senators when they have budget?
“We have been footing their flight bills every now and then. The annoying part of it is that some of those trips had no bearing on our operations “, he confided in Daily Sun.
As the avalanche of allegations rage with SEC management maintaining a deafening silence, stakeholders in the capital market have called for a thorough investigation into all of them the business community is hurt by the development.
Consequently, they have called on the Federal Government to immediately hire seasoned independent investigators to unravel the veracity of the matter to protect the integrity of the market.
Mr. Eric Akinduro, Chairman, Ibadan Zone Shareholders’ Association, said the need for independent investigators is to ensure they are not swayed by sentiments as the matter at hand needs to be proven right or wrong in the interest of the country.
He said: “Well since they are allegations, I believe there should be proper investigation to know whether they are true or not. I wish to say there should be an independent investigation to know if an apex regulator is involved in such mess. After the investigation, if the allegation is true, then the law should take its course. This is not the first time we have issues like that, so let them investigate and if he is found guilty, he should be brought to book.”
Also commenting on the matter, another shareholder activist, Mr. Moses Igbrude, called for transparency in handling the issue, adding that a thorough investigation should be conducted to verify the authenticity of the allegations. “First of all, someone has to come out clean if it is true. A thorough investigation has to be done because many people are out there to run someone down. I would also say that let things be done transparently because they are the regulators and we are looking up to them. And if after investigation, the allegation are true, then law should take its place.”
For his part, Mr. Boniface Okezie, National Coordinator of Progressive Shareholders Association of Nigeria (PSAN), also wants the allegations investigated to know if they are true or not. He said the Gwarzo is the apex regulator’s head and such allegations against him should not be left hanging in order to protect the integrity of the market.
For Mr. Timothy Adesiyan, leader of the Nigerian Shareholder Solidarity Association (NSSA). “We can never leave such matter like that because he is always the senior prefect leading others to investigate such things in other areas and even organisations that have not committed anything even up to 10 per cent of what is being alleged against him, they should probe and investigate it. We as shareholders will be interested to see that investigation has been done. Whosoever wants to investigate must himself have clean hands and SEC has to clear itself. Right now they are investigating Oando and if they are investigating Oando for something that cannot be substantiated, why is SEC not being investigated? Everything must be done to investigate this matter thoroughly. It must not be by SEC but other superior authority has to investigate this matter”.
However, another stakeholder who spoke to Daily Sun on the condition of anonymity said the SEC boss should be investigated because, if the allegations were the other way round, the SEC would have swung into action immediately.
“I think he should be investigated because this is related to the capital market and transparency is supposed to be our watchword and as this concerns the apex regulator. It is the case of the hunter being hunted.
“There has to be thorough investigation so that we can get to the root of the matter. I thought severance package is paid to people that have retired? Why will he do that as the head of an apex regulator? He doesn’t just need to be investigated, he needs to be investigated thoroughly for the sake of the market integrity and then if it turns out to be false, then he would have cleared his name,” he said.
However, despite the weighty allegations, the Head, Corporate Communications of SEC, Naif Abdussalam insisted the management has not breached any rules or protocol.
In a rejoinder released on August 26, Abdussalam said SEC had been aware of the allegations contained in an online
article since January 2017 following the receipt of a petition.
“As a tradition, the Commission follows laid down rules and regulations in all its activities, and in this particular case, we ensured that no relevant policy was breached. However, the Commission is currently putting together an official response and will issue same shortly”, he said.
What has become worrisome is that SEC management has not deemed it fit to respond to the allegations since January when it claimed to be aware of them, neither has it released any detailed official response as stated in the October 26 release signed by Abdussalam.
However, stakeholders await government’s intervention in the matter that is capable of hurting the capital market.