SEC boss, Arunmah Oteh, may face criminal charges
June 26, 2012 in Nigerian Current Affairs
Embattled Director- General of the Securities and Exchange Commission, SEC, Ms. Arunma Oteh, may face criminal charges over serious breaches of the law in the handling of the N185m donations received from several corporate bodies including banks, towards the organisation of the Project 50 programme in 2011.
National Mirror learnt that the Attorney- General of the Federation and Minister of Justice, Mr. Bello Adoke, SAN, is considering pressing charges against the SEC DG and a final decision will be taken when the report of an independent audit being carried out by PriceWaterhouseCoopers, PWC, into her tenure is submitted in about a fortnight.
Oteh was sent on compulsory leave by the SEC board on June 12 following a damning report presented on May 27, 2012 by the Commission’s Audit and Finance Committee, chaired by Mr. Chris Chukwu.
The Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo- Iweala had endorsed the committee’s recommendation of an independent audit of Oteh’s tenure.
The report established a case of financial irregularities, lack of transparency and breaches of staffing rules, which had culminated into what the committee termed a “Commission operating within a commission” with grave implications for financial system stability.
According to a copy of the report, obtained exclusively by National Mirror, Oteh breached certain provisions of the Investment and Securities Act by directing that donations solicited under the platform of SEC to support Project 50 be paid to third parties identified by her.
“That directive in and of itself packed the potential to circumvent the accountability and transparency stipulated in Section 19 (1) (c) of the ISA (2007), which requires that all monetary gifts, contributions and other funds that may be received by the commission to be paid to the commission fund, established under that section. In view of this, that directive is inappropriate. In fact, it is against the law,” the report said.
It also noted that the Central Bank of Nigeria, CBN, declined to make good its pledge of N50m through a third party.
The committee noted that the Board was particularly miffed by the conduct of one Mr. Titilope Olubiyi, a contract staff hired by Oteh, who allegedly coordinated the Project 50 payment but when questioned by the Board, was said to have attempted to conceal the facts including those already in the public domain, in a bid to mislead the committee.
The Committee ordered Olubiyi’s removal from SEC “without option of return” pointing out that he constituted a risk to the Commission and the country in general.
The report noted that the SEC board was well within it limits and had not made any strange demands in asking for a full accounting for the Project 50 within six months of the event taking place, and stressed that having to “prod and wait” for this statutory and expected accounting was at variance with SEC’s stance on full disclosure and transparency.
“In the view of the Committee, the Project 50 and other projects like it are an indication of a commission within a commission. This practice is unsustainable and capable of destabilising the financial system,” the report said.
Oteh also came under fire for transferring cases being handled by SEC’s Administrative Proceedings Committee, including those relating to Union Bank, Finbank, Spring Bank, Afribank and Bank PHB to the Investment and Securities Tribunal without board approval and legal opinion of SEC’s lawyers.
The DG’s “sins” also include her eight-month stay at Transcorp, contrary to the 56 or 28 day maximum provided by SEC’s and Civil Service Commission Rules; noncompliance with monetisation policy with respect to the 10 motor vehicles assigned to her office and failure to regularise the appointments of contract staff brought by her to SEC.
The Committee said this had resulted in preferential employment and placement of the said contract staff at level believed to be much higher than their work experience, qualifications and other hiring criteria. The committee noted that this as well as the negative the issue attracted during the House of Representatives’ Committee hearing could have been avoided if she had followed the rules by regularising the appointments within a year of engagement.
The Committee also made some key recommendations of which include revisiting the Access Bank/Intercontinental acquisition deal, disengagement of contract staff pending due diligence of their status as well as the removal of all Access Bank staff seconded to SEC.
However, a source close to Oteh dismissed the report as a hatchet job written by someone who was hoping to get reappointed to the Sec board.
“All the report did was to second guess the so-called public hearing and package the falsehood and rumours and pass them off as n audit report, he said.
The source, a close aide of the embattled DG said Section (1) (c) of the ISA did not apply in this Project 50 case as it relates to donations made to SEC, while the project was market wide initiative that involved the CBN, Federal Ministry of Finance and the Federal Ministry of Trade and Investments.
“There was no slush fund, there was no Project 50 account, the total cost was N155m and even banks that participated commended the prudence in packaging an event of that scale and scope at that cost,” he added.
The PWC audit is expected to be completed in less than two weeks.
Via National Mirror
