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Capital Market Probe: House Hearing Exposes Infighting at SEC

10 May 2012

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Director -General, Securities and Exchange Commission (SEC), Ms. Arunma Oteh 

By Onwuka Nzeshi   

The ongoing investigation into the near collapse of the Nigerian capital market by a House of Representatives ad hoc committee assumed a new dimension yesterday as the Director-General, Securities and Exchange Commission (SEC), Ms. Arunma Oteh, and members of her management committee openly disagreed on policies, programmes and actions of the regulatory agency.

The session exposed an institution torn apart, with an atmosphere of deep-seated animosity and mutual distrust not only among the top echelon but within its rank and file.

The committee had on Tuesday issued a summons on Oteh and the entire management team.

This was after the same committee had hinted that it had received a series of petitions suggesting the existence of serious wrangling and crisis within the regulatory institution.

In the opening shots at Wednesday's proceedings, Oteh apologised profusely over her absence on Tuesday and explained that she did not intend to undermine the parliament when she excused herself from the public hearing.

Chairman of the panel, Hon. Ibrahim El-Sudi, promptly accepted her apology and also clarified that their rather harsh reaction was not out of any personal grudge but an attempt to ensure mutual respect in the relationship between the executive and the legislature.

“We have no ill feelings at all or harbour any other motives other than to ensure that Nigerians respect our democratic institutions. All the arms of government complement each other and we must not undermine any of them,” El-Sudi said.

The panel then opened its file of petitions and confronted Oteh with the several allegations levelled against her by persons suspected to be insiders in the organisation she superintends.

The petitioners accused her of high handedness and running a non-inclusive administrative system.

She was also accused of embarking on massive recruitment drive and head-hunting of persons styled as young professionals while ignoring the pool of personnel she met on ground.

Oteh was also confronted with the allegation that she allowed two members of  staff of Access Bank Plc to be seconded to SEC, a situation they claimed represented a conflict of interest.

Although Oteh tried to justify all the actions, her claim that these actions were the result of expert advice and collective decision of the management deflated her defence.

One after the other, members of the management, who ought to know the inner workings of SEC, disowned these decisions and actions, leaving their boss in the lurch.

The Executive Commissioner in charge of operations, Ms. Daisy Ekineh; her counterpart in charge of legal and compliance, Mr. Charles Udora; and the one in charge of administration, Alhaji Sanni Stores, all declared that they were never aware of any management decision to hire contract staff or get personnel seconded from institutions  regulated by the  commission.

Director of Human Resources at the agency, Mr.  Useni Dauda, testified that due process was not followed in the recruitment of some contract workers and alleged that they were unilaterally hired by Oteh on assumption of office.

According to Dauda, this category of employees were yet to get the endorsement of the executive management committee and the board of the agency.

He also affirmed the allegation that the contracts the affected personnel were renewed against the advice of the audit department.

SEC’s management team was also divided on the road map document currently being implemented in the capital market by the Commission.

Oteh had told the panel that the document was a collective effort of the management team and other stakeholders.

According to her, the road map was  in line with a recommendation made by an industry-wide committee set by the SEC in 2008 before she assumed duty in 2010.

But again some of her colleagues on the management committee disowned the document and tagged it as the idea of an individual which was being driven by one person.

Apart from Ekineh, who said she made some input, Udora and Stores  declared that nobody ever  approached  them over the road map and no one had ever brought the  document to their knowledge.

There were also altercations over a programme tagged "Project 50"  and the involvement of the regulatory agency.

The commissioners insisted that they were never aware of any donations made by corporate organisations for the Project 50, which was meant to celebrate 50 years of capital market regulation in Nigeria.

However, Oteh managed to avoid the continued altercations launched against her and insisted that she was focused on the transformation of SEC as well as reviving the capital market.

She said that the commission was fully committed to overcoming those challenges and strengthening the organisation to position it to successfully birth the world-class Nigerian capital market which is the object and vision of the transformation project.

“The SEC is not unlike other human institutions; the commission is not immune to common challenges arising from cultural and personal differences,” she said.

She remarked that the change project she is leading has the final objective of converting the SEC to a regulator with the best tools, personnel, systems and processes to discharge its regulatory oversight and market development mandate to international best practice.

According to Oteh, a transformation project of this magnitude has culture shock and cultural lag implications which are sure to create feelings of apprehension and even alienation among some members of the SEC family.

She promised that SEC, having closely followed and actively participated in the ongoing House of Representatives public hearings, had noted the frank disclosures at the hearings and intends to factor these into the change management element of the institutional transformation project.

“The hearing provides very useful lessons that will guide the commission’s continuing institutional strengthening programme.
The commission wishes to state categorically that the SEC remains a cohesive institution, whose activities are driven by highly professional and patriotic staff members under the headship of a very experienced management team and board delivering exceptional service to participants in an envisaged world-class Nigerian capital market,” Oteh said.

Meanwhile,  the  Commissioners said that for a better regulation of the market, there must be harmony in the management of SEC.

Suggesting the way forward, Ekineh, for instance, said that there should be more communication among the management team and staff members.

“The way forward is to communicate more. We should do more of personal meetings  than more of emails and text messages. Although they are good but we should have scheduled meetings. We also need to respect one another.  That is very important. There should be team work because people succeed more when there is team work and that is very important,” Ekineh said.

According to her, in the past management staff used to assemble in the DG’s office and rob minds together before  going  back to their offices to work.

This, she said, was lacking now, adding that "this is why we are having some of these issues. So the communication is very important”.

On his part, Udora said SEC should be an institution that can be on auto drive.

“And how can you achieve that? You set up institutions and set up systems and not individuals and this is done by setting out rules so that whether you are there or not, the job will be done. What is going on is because there is lack of trust and among us,” he said.

He also said the problem he has with the issue of contract staff is getting these people without following due process.

“When you hire people, allow them to go through the system and let the system absorb them.

“And then there would be harmony in the system. The contract staff has created disharmony among our staff. Because people came through the process they were not supposed to and they are occupying positions they do not know much about and giving wrong advice is creating lot of disharmony in the system,” he said.

Tags: News, Nigeria, Featured, Capital Market Probe, House Hearing, SEC

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  • We still havent addressed the theme of the probe. What caused the collapse of the Capital market. The market collapsed in 2008, it cant be the internal wranglings in SEC which started in 2009/10 when Oteh came on board. Deal with Ndi Okereke, Al Faki and the issues that have been raised first before we start evaluating why the market is not back on its feet. I see an orchestrated sitting with an aim. Oteh hasnt been a team player obviously and i fault her in many aspects but her Exec. Commissioners appear vindictive; the panel seems biased (except Hon. Okoh, the only woman on the panel who has been the only one focused on the main issues). Naija, i hail you!

    From: Seun

    Posted: 2 years ago

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  • THE white man said it is the black man. The black man said it is the coloured man. And what did the coloured man say? Get the answer from the lyrics of a song by the late Lucky Dube.

    Both the SEC and Stock Exchange presided over a market that went into an engineered spin benefiting both parties and the cohorts. Now the fingers are all pointing away from themselves. May we not die in our sins. By the way, where is Mr President's transformation agenda? Has any body seen it. Who ever that sights it should please report to the nearest police station(did I say Police Station) and get a large reward.

    From: Philemon

    Posted: 2 years ago

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  • This is typical Nigeria problem.

    Come to think of it, with the way these women given these positions are carrying themselves, I am afraid in electing women into positions in this Country. Its like they throw away the heart of a mother to take that of a beast when they get to positions of authority.

    From: Bayo

    Posted: 2 years ago

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  • It is rather very unfortunate that Nigerians who are trusted with the responsibility of transforming the Nation to an Industrialized giant is fighting a much needed way of getting our dreams come true because their focus is not aliened to the transformation agenda but rather the old way of sitting at a round table to seep tea and share tax payers money. The system can only be cleansed if we can have a situation where such people will be shown the way out of the system without politicizing the facts of the matter.
    There are several Nigerians in the diaspora who are ever willing to come back home to fix the economy of the Nation but because of these old cargoes that believe in maintaining the old way of *IT IS MY TURN*, the few of Oteh likes that ventured into changing things are faced with these corrupt minded management team. The whole issue is because no more CHOP I CHOP again in SEC as it was before. GOD will deliver NIGERIA.

    From: Dzarma

    Posted: 2 years ago

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  • Nigerians let us read between the lines and appreciate how difficult to change this country for good.
    1. when this woman was made the head of SEC some people said she was not qualified for the job, that she was just a mere receptionist at ADB
    2. Ms Oteh is the only newcomer in the Management,others had benefited from the past corruption she wants to change
    3. She is surrounded by enemies who had benefited from the past corruption in SEC and NSE, these people are connected and rich and ready to fight back and fight dirty .
    4. One of the Directors claimed that no frequent structured meetings were held and yet they do receive e-mails,It shows how backward these Directors are in the information age, all they needed to do is to reply the e-mails to state their views/objections.
    5.Members of the new Rep panel have sympathy for their disgraced colleagues who demanded bribe from this woman hence the pattern of their questioning including questions met for CBN
    6. In all these,it is difficult to change a corrupt system as a loner surrounded by enemies who had fed fat from the system to be changed.
    7 The panel should probe the past Management of Musa AL-Faki and the ones before him to appreciate the rot in SEC and NSE that this woman is battling with.
    8. I admired the confidence this woman exhibited and for me it shows her passion for the country and her desire to change things for better.

    From: Awojobi Olakunle

    Posted: 2 years ago

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  • Nigerians let us read between the lines and appreciate how difficult to change this country for good.
    1. when this woman was made the head of SEC some people said she was not qualified for the job, that she was just a mere receptionist at ADB
    2. Ms Oteh is the only newcomer in the Management,others had benefited from the past corruption she wants to change
    3. She is surrounded by enemies who had benefited from the past corruption in SEC and NSE, these people are connected and rich and ready to fight back and fight dirty .
    4. One of the Directors claimed that no frequent structured meetings were held and yet they do receive e-mails,It shows how backward these Directors are in the information age, all they needed to do is to reply the e-mails to state their views/objections.
    5.Members of the new Rep panel have sympathy for their disgraced colleagues who demanded bribe from this woman hence the pattern of their questioning including questions met for CBN
    6. In all these,it is difficult to change a corrupt system as a loner surrounded by enemies who had fed fat from the system to be changed.
    7 The panel should probe the past Management of Musa AL-Faki and the ones before him to appreciate the rot in SEC and NSE that this woman is battling with.
    8. I admired the confidence this woman exhibited and for me it shows her passion for the country and her desire to change things for better.

    From: Awojobi Olakunle

    Posted: 2 years ago

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  • we can discern the body language of the Panel,otteh must be gunned down.She is a new tough guy standing on the way of the old order.i hope and pray she survives this deadly schemes.

    From: Emeka Eze

    Posted: 2 years ago

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  • I am suprirised nobody is asking the commissioners who are now crying fowl what roles they played in the collapse of the capital marekt since they were all around during the market meltdown. They should answerNigerians and the international community why they should not be reprimanded for doing nothing to safeguard the capital market?

    From: George

    Posted: 2 years ago

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  • All these commissioners are guilty, they were with Ndi Okereke is detroying SEC, and they are trying to accuse Oteh who was only came on board to help stay the course. This is very stupid, malicious and embarrasing. It seems the house is still not focused on addressing the causes of the capital failure. Ndi Okereke must be invited, the market collapsed in her tenure.

    From: Ubong Obot

    Posted: 2 years ago

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  • It is rather unfortunate that people who have the responsibility to join hands in building SEC are the ones tearing it down. The financial system in Nigeria is divided into 2 broad categories; these are; the Money and Capital Markets, each overseen by the CBN & the SEC as the major Regulators. It is therefore a shame that Management Staff of such a major institution can reduce themselves to shameful levels by these revelations just because of these matters raised. I guess the SEC has up to 1,000 Staff members. Are saying that just because of 2 recruits that not management Staff, the roof of SEC must go down? The revelation that another reason for poor relationship was because madam was not allowing us to come & drink tea in her office every morning as was the case of her predecessor is another no-brainer. If Management Staff can reduce themselves to such mundane levels instead of busying themselves developing policies that will help drive the Capital Market, then we need not look for the reasons why the capital market failed anymore. Nigeria is too great for such shameful and visionless persons in authority. It is time we wake up & live up to our responsibilities and deliver the services for which we were hired and being paid by the tax payers earnings. Oteh, on your part, know that no single tree can make a forest. Please, cooperate and carry everybody along with the view to achieving the goals & objectives for which the SEC was set
    up. Thank you.

    From: Agillo. agilloagillo@gmail.com

    Posted: 2 years ago

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  • Ms Aruma Oteh is simply faced with a disgruntled mgt. Team dat has seen her as a stumbling Block to its old system. Whatever their reasons might be, the truth is dat they simply ganged up against her because she's no longer doing their bidding(though, she is not totally innocent of all the allegations). She should forget about the elaborate and over bloated project she's talking about and take simple methods of revamping the SEC. Nigeria already has a FAILED System in place. This produces a FAILED Govt. which in turn creates a FAILED ECONOMY. May God help us.

    From: True Nigerian

    Posted: 2 years ago

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  • we should apprehend who stole the meat from the mothers pot rather than blaming the person that came after the meat has been stolen Ndi Okereke seem to have bought everybody with her so called assemble of staffs in her office to rob minds together before going to their offices to work. but this mind robbing brought us to were we are. this same people rob their minds together and collapse the market, they should retire and bury their faces between their legs for shame

    From: jodick

    Posted: 2 years ago

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