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Securities And Exchange Commission Embarks On A Journey Into Impunity With Employment Of The Outgoing Chairman’s Son Against Due Process Among Other Nauseating Acts

Sam Diala

Barely four months after Ms Arunma Oteh retired as Director- General of Securities and Exchange Commission (SEC), a simmering cauldron of impunity appears to have attained a boiling point at the organisation. This development has become a source of internal disharmony among members of the apex market regulator who also express serious concern that the matter could have negative effects on the bourse of Africa’s largest economy. Concerns raised by stakeholders and industry experts hinge on the fact that if poor corporate governance culture is allowed to thrive in the organisation, it would be a mirage attempting to provide the required transparency to drive Nigeria’s capital market with huge investors’ assets. Investigations by The UNION indicate that since Oteh’s retirement, SEC has become a place of controversial actions that insider sources say border on impunity, corruption and other unethical practices. Our source who preferred not to be named for obvious reasons, told The UNION that, under Oteh’s leadership, such acts of impunity were promptly arrested and their perpetrators were not allowed the room to operate.

As The UNION gathered, at the centre of the unwholesome episode is the Commission’s Six-man board headed by Dr. Suleyman Abdu Ndanusa. According to our source, the board operates on a platform that makes transparency a strange concept in corporate governance at SEC. The source pointed out that this had resulted in the abuse of due process and financial recklessness at the organisation. As the source put it, “The culture of impunity and defying due process has become a common, way of life at SEC,” noting that what was happening in the organization exposed the board’s deliberate choice of impunity as a way of corporate governance, coupled with greed. “There is the standard assumption that the boards of all parastatals are likely to be dissolved by May 29, so what they are doing is to satisfy their objectives as much as possible before that potential eventuality.

The greed element in man and the dimension of impunity are the two factors that coalesced into their action,” the source explained. The UNION learnt that the abhorrent level of impunity at SEC manifested in the alleged recent appointment of the son of the board chairman, and a younger brother to an executive commissioner, without following due process, and observing the stipulated federal character principle. This, The UNION gathered, is worsened by what our source described as “questionable training programme by executive management for SEC members of staff which runs into millions of Naira”. The UNION learnt that the Commission offered permanent employment to six new members of staff “in breach of due process and flagrant disregard of the federal character principle”. One of the beneficiary of the illegal employment is Abdukareem S. Ndanusa, who assumed duties as Senior Supervisor (II).

Ndanusa, who allegedly completed his National Youth Service Corps (NYSC) assignment only a few months ago, was recommended and offered employment at SEC as Senior Supervisor (II). He is son of the board chairman. The Commission’s Executive Director, Corporate Services, Zakawanu Garuba, also got his share of the employment largesse. His younger brother, Abdul-Afiz Garuba, was recommended and offered employment, also “without recourse to due process”. Garuba, who studied engineering, was employed as Assistant Manager. Other beneficiaries of the unauthorized employment, The UNION learnt, are Gana Muhammad Abdulkadir, employed as Senior Supervisor; and Hassan Bello Maitama, engaged as Senior Supervisor (II). Others are Ali Mohammad Dauda and Halilu Salamatu – both employed as Assistant Managers.

The UNION learnt that the appointments were in total breach of standard rule on employment in the Commission which stipulates that such employment should be subjected to a competitive selection process. The process involves advertising the positions in national newspapers and having the shortlisted candidates undertake aptitude test as well as oral interviews. It was also revealed that under merit employment consideration should be given to candidates’ discipline visà- vis their prospective positions and cognate experience. All beneficiaries of the irregular employment, who come from one part of the country in violation of the federal character principle, were not subjected to the stipulated employment guidelines.

The UNION also gathered that the illegal engagement of the six beneficiaries was the handiwork of the chairman and Mounir Gwarzo, who at the time was Acting Director-General. Gwarzo was confirmed substantive DG by President Goodluck Jonathan on April 27. Also appointed was Mr. Peter Obi, former Anambra State Governor, as SEC chairman. This newspaper learnt that SEC workers under the aegis of the Amalgamated Union of Public Corporations, Civil Service and Recreation Employee, had protested the illegal employment by leading a delegation to management. Our source, however, disclosed that the protest was not expected to achieve anything tangible. Why? SEC workers union is a midday creation of some elements opposed to Oteh. “The union was formed exclusively (in 2012 after about 40 years of existence of SEC) simply to fight Oteh. The body was not formed for any meaningful objective aimed at adding value to workers’ welfare. The union has not said a word on this flagrant violation of due process.

All I heard was that they sent a delegation to the perpetrators of this act of impunity,” a source said. Another source of concern is the strange “foreign local training” approved by the board to train about 400 members of staff at N740,000 each. The UNION learnt that following the ban on foreign training for government ministries, departments and agencies (MDAs) SEC executive management secured board’s approval to conduct the exercise locally but at a fee charged for foreign training. The staff union recently rejected the Commission’s proposed “foreign local training” in the country, describing the course fees of N740,000 per staff as “outrageous” and a project that violates due process. It was learnt that the union leadership had communicated the workers’ objection to management pointing out that proposed training programme by the management and its associated costs were beyond current economic realities.

“Apart from the outrageous course fees, the commission will also pay for all the logistics relating to the training venue, refreshment, course material, etc. “The workers union is of the firm view that for the management to approve the huge course fees of this nature, it required compliance with tender process or obtaining letter of No Objection from the Bureau of Public Procurement,” the staff union was said to have protested in a letter to Gwarzo, and copied to other agencies, including the Federal Ministry of Finance and the Economic and Financial Crimes Commission (EFCC). Attempts made to reach Yakubu Olaleye, SEC’s spokesman, by telephone was not successful. He also refused to respond to the SMS sent to his mobile number on the development at SEC. The staff union’s Chairman, Mohammad Salihu and Secretary General, John Briggs, did not respond to calls and sms sent to their GSM numbers except that Salihu, through an sms, demanded (again) the identity of the caller which was provided the second time.

Stakeholders who spoke to this newspaper last week, also expressed concern that the recent appointment of former Anambra Governor, Peter Obi, might be threatened after May 29. A source in SEC described Obi, a former board chairman of Fidelity Bank, as “a consummate corporate guru who knows what it takes to provide leadership at all levels”. The source however said that given the attitude of the incoming Buhariled government and the key role Obi played in the re-election bid of President Jonathan under PDP, it is unlikely that his tenure would be left intact, more so, when a section of the country would want to protect the interest of those who have chosen to run the establishment as their fiefdom.

It will be recalled that Gwarzo came under fire for his alleged approval of N30 billion bond for Gombe State government, shortly after Oteh’s exit, even when his immediate predecessor had objected to the approval. A political pressure group, Gombe Good Governance Group, otherwise called G4, had petitioned President Jonathan, and demanded Mr. Gwarzo’s immediate removal for allegedly approving the second tranche of the bond in defiance of a subsisting restraining court order. The Ibrahim Dankwambo state administration had approached the capital market last year to raise the bond to enable it to finance its infrastructural development programmes. While the first of three tranches, worth N10billion each, was earlier released to the state government, approval for subsequent releases was dependent on the fulfilment of certain conditions spelt out by the regulatory authority.

Part of the conditions included a detailed report reviewing what the previous funds were used for as well as a list of new projects, programmes and activities the new tranche of funding would be deployed. However, following the state government’s request for SEC’s approval for the release of the second tranche of the fund, G4, led by Mohammed Barde, instituted a legal action against the Gombe State government. The suit also sought to tie the hands of the Federal Ministry of Finance and Debt Management Office (DMO), from acting on the matter. Gwarzo, who maintained that the approval followed due process and that his action was in order explained that the first tranche worth was issued in 2012 and in line with SEC’s rules and regulations. “We carried out on-site verification inspection of the projects completed from the proceeds of the first tranche. Our technical team satisfactorily verified and certified the projects and recommended approval of the second tranche,” Gwarzo disclosed.

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