SEC AND THE RULE OF LAW

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The Securities and Exchange Commission must act within the law, writes Emmanuel Idongesit

Like a thief in the night, in the early hours of Sunday, June 30, and in a manner that has disappointedly become tradition for the Securities and Exchange Commission (SEC), the commission made known to the media its intent to partner with the Federal Inland Revenue Service (FIRS), the Nigeria Stock Exchange (NSE) and the Corporate Affairs Commission (CAC) by sharing findings from its investigation into Oando PLC. The assumption is that through this partnership the company and its executive management can be further sanctioned.

If the SEC goes ahead with this action it will be in clear violation of the interim injunction obtained by Oando’s principals Adewale Tinubu, the Group Chief Executive and Omamofe Boyo, the Deputy Group Chief Executive which restrains SEC, its servants and agents from directing or requesting any agency of the government to act upon its decisions contained in its letter of 31st May pending the hearing.

I have followed the SEC and Oando saga closely over the past few weeks and I must say that if the stories are indeed true then SEC’s actions will be nothing short of a brazen disregard for the rule of law and an abuse of power.

You would recall that the SEC had on May 31, 2019 released findings from the forensic audit into Oando including sanctions, and in the stealth of the night of June 2, setup an interim management team to oversee the affairs of the company, without formal notice to the organization. However on June 3, a Federal High Court in Lagos granted an interim injunction to Oando’s principals restraining the SEC and associated agencies, such as the FIRS, NSE, CAC and the likes from acting on the May 31 sanctions pending the court’s hearing of the suits. The case which was heard on June 13 and 24 respectively, has since been adjourned to July 22.

The purported reports in the media is that the commission plans to release the forensic audit report to these government agencies even though Oando is yet to see the report which it will allegedly pay a whopping N130 million for, using shareholder funds. What is worrisome is why the SEC is bent on acting above the law by disregarding the court injunction all in a bid to replace the management of Oando regardless of the damning effect this action will have on the company, the regulator and the country at large.

If the SEC does go ahead with this action it will give credence to Paul Usoro’s (SAN), President of the Nigerian Bar Association (NBA), opening remarks at the recently concluded NBA National Executive Committee Meeting held in Abuja. Paul Usoro addressed the issue of the state of the rule of law in Nigeria; he spoke about a penchant of Nigerian governmental authorities disobeying court orders.

The principal role of the judiciary is to protect the rule of law and ensure supremacy of law. It safeguards the rights of the individual, settles disputes in accordance with the law and ensures that democracy does not give way to individual or group dictatorship. It is an independent body and a vital institution in a democracy. Thus it is frightening when regulators who play a similar role in society, one of safe guarding citizens and who understand better than most the importance of rules and compliance, intentionally decide to ignore and disobey the judiciary and rule of law. It’s terrifying when this is no longer speculation but a bold proclamation of the reality of today’s judiciary by the President of the NBA.

The SEC and all other agencies should be reminded that the federal government of Nigeria is made up of three distinct arms: legislature, executive and judiciary whose powers are vested by the constitution of Nigeria in the National Assembly, the President and the Federal Courts including the Supreme Court respectively. The law of Nigeria is based on the rule of law, the independence of the judiciary and British Common law. We operate a democratic regime and if indeed SEC and other governmental agencies proceed to investigate and sanction Oando despite a court injunction then all characterizations of regulatory rascality will be true and as a people we must not condone this.

Putting Paul Usoro’s comment into perspective, what judge would want to rule on a case against an agency that has publicly disregarded its rulings? The SAN explained that “If you ask any counsel of note they will tell you a significant consideration in planning the strategy for the prosecution of any case that the government, notably the federal government has an interest in, is the concern as to whether the presiding judge has the backbone and fiber not to be looking continually behind his or her shoulder to decipher how the government wishes the matter to be determined.”

This state of affairs totally undermines the independence of the judiciary and the ability of judges to act independently and confidently without fear or favour in dispensing justice to all manner of men and this seems to be the case being played out.

Going back to the trend of events between the SEC and Oando, this won’t be the first time the SEC has been in contempt of court. Whether the SEC wants to admit it or not the delay in notifying the police to leave Oando’s head office on receipt of the court injunction and then the suspension of the company’s Annual General Meeting (AGM) was in contempt of court. The President’s most recent move in inaugurating a Board for SEC, after four years is a step in the right direction. It’s the executive heeding the clarion call to put SEC’s house in order so that they can effectively regulate corporate governance first by having good corporate governance themselves.

A board finally means that the Acting Director General Mary Uduk cannot take any actions without their review and approval; if over the last four years the SEC has at different times over reached its authority the hope is that a board will finally bring some sanity, transparency and due process to the regulator.

If the media reports are indeed true let the other agencies – FIRS, CAC and the NSE sit up and ensure that they stay on the right side of the law. If on the other hand these media reports are just the act of trouble makers seeking to continue to stir this Oando- SEC saga let the agencies take note and not be deceived into making a mockery of the Nigerian judiciary. Any action that puts them in contempt of the court has far reaching implications for the country.

According to Paul Usoro, “The International Bar Association bye-line is if you take care of the rule of law, the rule of law will take care of you. The rule of law has a profound impact and effect on how our society operates, without the rule of law society gradually descends into a state of anarchy and democracy becomes a mere pretension. Democracy itself cannot survive without the rule of law. It would be revealing if we were to have proper and verified statistics on the investment opportunities that have been lost to Nigeria because of these twin pervasive challenges – insecurity of lives and property and the erosion of the rule of law. As an Association of Lawyers, we must constantly rise up to challenge our leaders on these twin fronts. We must hold our leaders accountable for security of lives and property while also defending and promoting the rule of law in our society.”

Emmanuel is a Legal Practitioner and Activist