Gwarzo and Burden of Suspension as SEC DG

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Mounir Gwarzo

Goddy Egene writes on the non-resolution of the case of the suspended Director General of the Securities and Exchange Commission, Mr. Mounir Gwarzo, two years after
Last Friday, November 29, 2019 made it exactly two years that Mr. Mounir Gwarzo was suspended as the Director General (DG) of the Nigerian Securities Commission (SEC) by the former Minister of Finance, Mrs. Kemi Adeosun.

Adeosun had then explained that, “Gwarzo’s suspension followed proven cases of financial misconduct, unlawful carting away of sensitive documents, in addition to unsatisfactory response to queries served on him.”
Gwarzo, was alleged to have requested and received the sum of N104 million as severance package when he became DG in 2015. The money was reportedly for his previous position as executive commissioner.
He was also accused of violating the rules guiding the SEC by awarding contracts to his companies and those of his family and friends.

Adeosun then set up an Administrative Panel of Inquiry (API) to investigate and determine the culpability of the suspended DG. The API, which was alleged to have been made up entirely of staff of the Ministry of Finance with the Permanent Secretary of the Ministry as chairman, recommended that the severance package paid to Gwarzo should be refunded and that he should also be dismissed from work.

Although Gwarzo was said to have been suspended due to proven cases of financial misconduct, it is strongly believed that his decision to carry out a forensic audit on Oando Plc following the receipt of petitions by the SEC from two shareholders of the company Alhaji Dahiru Mangal and Ansbury Investments Inc) against the company’s management was his major undoing.

After the recommendation of the API, The Independent Corrupt Practices and Other Related Offences Commission (ICPC) eventually charged Gwarzo to court before his Lordship, Justice Hussaini Baba Yusuf of the FCT High Court, Maitama, Abuja on a three counts charge. At the end of the trial, his Lordship, Justice Hussaini Baba Yusuf on Tuesday, April 16, 2019 gave a ruling on the three counts charges levelled against him by the ICPC. The trial Judge held that evidence led by ICPC through its fourth and fifth witnesses were contradictory and have been so discredited that no reasonable tribunal could find the defendants guilty. He therefore, discharged and acquitted him on all the three counts.

However, ICPC filed a dismissal suit before an Abuja Court of Appeal, asking that the court set aside the acquittal granted Gwarzo.
ICPC said Justice Hussein Baba-Yusuf of the FCT High Court, 4, erred in his ruling when he freed Gwarzo and a former Commissioner of SEC, Zakawanu Garuba of N104.9 million severance package and car allowance fraud.
It therefore, asked the appellate court for a retrial on 12 grounds and urged that the case should be re-assigned to another judge because the reasons for Gwarzo’s acquittal were against the extant laws that set up the commission and other government agencies.

But based on his stance that he was unlawfully suspended, Gwarzo filed a case at National Industrial Court of Nigeria (NICN) against SEC, Adeosun and the Attorney General of the Federation. The case was brought before Honourable Justice Sanusi Kado who at the end of the proceedings ruled and ordered as follows: a declaration is hereby granted nullifying the suspension of the claimant (Gwarzo) from office as contained in exhibit Gwarzo 4, as null and void and of no effect whatsoever for having been made without authority and is ultra vires the power of the second defendant; an order is hereby granted setting aside the suspension of the claimant (Mounir Gwarzo) by the second defendant, as the 2nd defendant has no vires to suspend the claimant; an order is hereby granted reinstating the claimant (Mounir Gwarzo) back to his position as DG of SEC;an order is hereby granted directing the first defendant to pay the claimant all his entitlements, allowances emoluments and all other entitlement as per his employment as from 29/11/17 to date and subsequently till the expiration of his tenure or lawful determination of his appointment, and the monetary aspects of this judgment shall be complied with within 60 days from today.

A day after the NICN handed down the judgment ordering the reinstatement of Gwarzo, SEC released the outcome of the forensic audit on Oando, with sanctions on the board members.
The report of the forensic audit highlighted issues such as; false disclosures, misstatements in financial statements, related party transactions, which are some of the reasons that necessitated the forensic audit.
Some market stakeholders have expressed concerns that the government, which prides itself on being law abiding and obeying the rule of law and has promised to enforce judgements given by courts of competent jurisdiction is yet to take any action.

According to them, the continued suspension of Gwarzo without resolving the matter is impacting negatively on the capital market.
“It is almost six months the federal government constituted a board for SEC and we still have an acting DG in person of Ms. Mary Uduk, who has been in acting capacity since April 2018. All the four executive commissioners are also in acting capacity. I believe the situation is like this because the substantive DG, Gwarzo is on suspension. It is high time the government resolved this matter because it is sending negative signals to international community and is discouraging investments,” a shareholder, Jude Akwa said.

The National Chairman, Progressive Shareholders Association of Nigeria, Boniface Okezie, had blamed the government for the confusion over the status of Gwarzo. According to him, the absence of a board for over years was not good enough and made the suspended DG to fall into the debacle he found himself.

“If the board was there everything would have been done by the board and all these would not have happened. The ministry does not need to interfere with the work of SEC because the commission is supposed to be independent,” Okezie said.