Ms. Arunma Oteh,

By Goddy Egene and  Onwuka Nzeshi 

Securities and Exchange Commission (SEC) workers protesting the recall of their suspended Director General, Ms. Arunma Oteh, Thursday got a tacit backing from the House of Representatives.

The House, which considered the report of the ad hoc committee it set up to probe the collapse of the stock market, which was submitted on Tuesday, adopted 29 recommendations, including the one seeking the sack of Oteh.

Oteh, who was asked to proceed on compulsory leave last month by the SEC board, was recalled on Wednesday by the Federal Government amid protests from the SEC workers.

Her recall negatively affected activities on the floor of the Nigerian Stock Exchange (NSE) as the crisis over her planned return led to a gradual erosion of the gains recorded recently.

Besides adopting the 29 recommendations of the House ad hoc committee report, the lawmakers resolved to stay action on eight other recommendations following an appeal by the Chairman, House Committee on Banking and Currency, Hon. Chukwu Onyereri, who said he had additional information on some of the recommendations.

The recommendations were those on the nationalisation of three banks and the roles played by the regulatory agencies.

The report had indicted the Central Bank of Nigeria (CBN), Asset Management Corporation of Nigeria (AMCON) and Nigeria Deposit Insurance Corporation (NDIC) for alleged breaches.
The bid to suspend action on the clauses raised controversy with some members warning that the House should avoid another scandal of changing positions in the middle of considering a report to avoid the crisis generated by such an incident during the consideration of the House Ad hoc Committee on the Monitoring of the Fuel Subsidy scheme report.

The lawmakers, however, endorsed the position of the report that the appointment of Oteh as SEC boss be terminated forthwith as it violated Section 3(2) and Section 38(1) and other sections of the 1999 Constitution as she did not have 25 years experience in the Nigerian capital market as required.

According to the report, Oteh apart from not having the requisite cognate experience in the capital market “has shown incompetence in the management of the human and material resources at her disposal in SEC and displayed lack of transparency on the job.”

It also faulted Oteh over the secondment of Access Bank staff members to SEC, which regulates the bank. According to the report, the secondment of the bank staff to SEC was unethical and it might erode investors’ confidence. It, therefore, recommended the immediate disengagement of the affected personnel from SEC.

The lawmakers also asked that SEC should withdraw its nominees in the council of the NSE so as to further boost investors’ confidence.

The committee said that during its investigation, it established that the N8 billion missing during the public offer by Union Bank Plc, in a bid to recapitalise the bank, was a case of fraudulent diversion of investors’ funds.

The report recommended that the past board and management of the bank, the chief executive officer of the issuing house to the offer, the present members of the board and management of the bank, including its Managing Director, Mrs Funke Osibodu, should be investigated by the Economic and Financial Crimes Commission (EFCC) with a view to establishing the facts and recovering the money.

The report faulted the CBN, NDIC and the AMCON for their roles in the nationalisation of three banks — Afribank (Mainstreet Bank), BankPHB (Keystone Bank) and Spring Bank (Enterprise Bank).

It said that the nationalisation of the banks and their subsequent change of names violated the AMCON Act, NDIC Act and Section 44 of the 1999 Constitution.

“The process of transfer (of ownership) were fraught with potential forgery, unethical practices, abuse of office and various unacceptable bad corporate governance precedents,” it said.

The report recommended that the transaction should be reviewed and for the EFCC to investigate NDIC Managing Director, Mr. Umaru  Ibrahim; AMCON Managing Director, Mr. Mustafa Chike-Obi; and the CBN Governor, Mallam Sanusi Lamido Sanusi, to establish their level  of complicity in the deal.

It recommended the prosecution of the Registrar General of the Corporate Affairs Commission (CAC), Mr. Bello Mahmud, and “all those who were used or offered themselves to be used in the various misrepresentations leading to the corporate registration of the nationalised banks”.

Also recommended for prosecution were all the “faceless lawyers” and directors of the three nationalised banks.
The report also cited Sanusi for contempt of the House for allegedly refusing to produce the special examination report upon which the intervention in eight banks in August 2009 was based.

The report recommended that Sanusi’s predecessor, Prof. Chukwuma Soludo; former Director, Banking Supervision of the apex bank, Mr Ignatius Imala; as well as CBN Deputy Governor, Mr. Tunde Lemo, who was also in charge of banking supervision be further investigated for their role in the banking sector crisis that led to the CBN intervention in 2009.

As the crisis over the recall of Oteh rages, the stock market recorded the first dip in seven days yesterday apparently in reaction to the uncertainty her reinstatement has brought to the market environment.

The NSE All-Share Index fell by 0.77 per cent to close lower at 22,098.21, while market capitalisation of equities shed N58 billion to close at N7.373 trillion.

Between when Oteh was asked to go on compulsory leave and Wednesday when she was recalled, the market rallied 9.8 per cent or N669 billion with the index hitting 11-month high of   23,277.30.

The index rose from 21,183.34 on June 11 when she was suspended to 23,277.30 last Wednesday, when the government recalled her. Similarly, the market capitalisation rose from N6.762 trillion to N7.431 trillion within the same period.

However, the negative reactions by the market community, triggered by the protest of staff members of the commission, have resulted in a gradual erosion of the gains recorded recently.
Some brokers had condemned the government’s decision, saying it would create more confusion and halt the recovery witnessed in the last few days.

Meanwhile, Oteh was yet to resume as at yesterday. Some senior staff members of SEC, who spoke to THISDAY, said they had been expecting her to come to the office.

“Today (Thursday), everywhere is calm. The security operatives have been around but we have not seen madam. Maybe she is still waiting for the Minister of Finance to return and probably for her to come to address us before the DG will resume,” the staff member said.

A source had told THISDAY that Oteh had decided to wait for the Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, who has been out of the country and whose ministry supervises the commission, to return today before she would resume.