The Recent suspension of Mr. Mouniru Gwarzo as Director General of the Nigerian Securities and Exchange commission (SEC) and the press reportage of the incident is an indication of where the Nigerian press is, with the fight against corruption. It has become obvious that a greater percentage of what we read in the press today is all biased.
The Mouniru Gwarzo campaign against the Minister of Finance and the way some sections of the Nigerian press have ignored the alleged corruption and financial impropriety levelled against Mr. Gwarzo, but instead-attempted to make all the issues about the Minister of Finance Mrs Kemi Adeosun and Oando Plc . It is a clear manifestation how superficial some sections of the Nigerian press have become. It is amazing how the press have made Mr. Gwarzo the victim. Nobody is asking about the well documented allegations. This is wholesale contracting of the press to write and carry only one side of the story and bury everything else about it.
It is notable that the Gwarzo allegations have been in the market for over a year and he has been in and out of the EFCC offices explaining himself. The fact that the main press ignored the story this big should be seen as reflective of what is actually going on. Since the story broke, press have not focused and reported on why Muniru Gwarzo was suspended, nor have they investigated the facts of the allegations. All they have been interested in is the hearsay claims that (he) Mouniru Gwarzo was verbally requested to stop the Oando forensic investigation.
Of course the Minister has now come out to declare this falsehood peddled by Mr. Gwarzo to create a cover for his alleged thievery as pure fiction. As the Minister pointed out, she gave the approval for the suspension of trading in Oando shares and ordered the investigation in the first place. And this was since November 4, 2017. The meeting at which the Minister was supposed to have verbally instructed him to stop Oando’s Forensic audit had witnesses. There is no way the Minister would have had an official meeting with him, without other officials of the ministry present. It is clear that the afterthought ‘memo’ he claimed he wrote to the minister the next day were lies.
One of our respected columnist, put up a column struggling to defend Mr. Gwarzo in a very sophisticated narrative but failed terribly. He was trying to re interpret ‘”severance pay” for his readers. Even for a skilful writer who normally can take any side of a public debate and win the argument, this was hard for him.
The purported memo approved by the Board in 2002 to justify Gwarzo’s payment to himself was for those who got a lump sum pay and left. What is the part of “severance pay” that Mr Gwarzo does not understand? If it was not wilful stealing, why did he not take the advice of his head of legal at the time who correctly told him that severance pay relate to those going away, or why did he not seek clarification from the ministry? Did he also have a memo to support all the contracts he gave himself through 11 companies used in siphoning money from the Commission? Or were they all family companies as he claimed? For the press to totally ignore all the allegations and focus on his lies is shameful.
Even some of his supporters started to falsely give him credit for the initiatives his predecessor, Ms. Arunma Oteh did. The Capital Market Master Plan, for instance, was conceived, completed and launched before Ms. Oteh left. Mr. Gwarzo got to his position as Director General of the SEC due to the usual Nigerian proclivity of making appointments based on who you know and where you come from. Mr. Gwarzo was not qualified for the job in the first place and has done nothing since he has been there. Yes, he has followed on all the initiatives or completed work of his predecessors, but he has not come up with anything new in the time he has been there. Mr. Gwarzo even after 5years in the commission, 2 years as Executive commissioner and 3years as Director General, still does not have the 15 years required by law for him to be appointed Director General. Mr. Gwarzo’ s longest service in the Capital market was at Empire Securities Ltd where he spent less than 5 years.
For all the claim that he was tough on infractions, Mr. Gwarzo was the Executive commissioner and later Director General when the case of Empire Securities Ltd was reported to the Commission, over 5 years later, the Empire securities matter is still hanging at the APC committee and nothing has been heard about it to date. For someone who has been very hard on infractions and very active in destroying other people’s businesses in the misguided belief he was doing something good, why has he not moved on Empire Securities case?
There may be more to the current allegations if those looking at the allegations are thorough. The Securities and Exchange Commission is a very sensitive place and all who work there must be above board. Mr. Gwarzo is in love with forensic audits, we should call for a forensic audit of all his financial dealings since he got to SEC to see if he practices what he preaches.
On the Oando Plc matter that everyone has become so feverish about, has there been any deep thought except, the usual Nigerian “bring him down” syndrome that wants to bring down anything successful. Oando is a success no matter what anyone says. What has been built requires brains. They have been smart by half, yes; they have handled a few things wrongly, yes. But that is not a reason to destroy what has been built.
Oando’s case clearly demonstrates again the incompetence of Mr. Gwarzo. The Oando audited accounts that are published and now being questioned are sent to SEC for approval before publications. They were examined by SEC, NSE and the Johannesburg Exchange where they are also listed. Oando is also one of those stocks that are widely held by both local and international investors with a hoard of analysts and yet none of these institutions and persons questioned Oando’s accounts until now. Has anyone thought about the wider implications? How will the issues that will arise be dealt with? For instance, SEC and the Nigerian Stock Exchange (NSE) approved a number of securities since these audited accounts were published. For example, their last Rights Issue were approved for the public to invest in, based on these audited and AGM approved accounts. Will SEC and the NSE compensate those investors who invested based on these approvals if the forensic audit now going on reveal infractions? Will investors not be right to sue all institutions involved in issuing these securities as fraudulent? Does this not set a bad precedent for all companies listed on the NSE today?
After Oando, any investor can also allege fraud and call for a forensic audit of past audited accounts of these companies. Can we now say no, because those making the call are not as rich and connected with those investors who now want Oando re-audited and ignore them? SEC had an opportunity to correct itself when the complaining investors first brought up the matter asking SEC to stop the AGM for the accounts to be examined. Because of incompetence, they ruled that the complaints were incompetent, because the complainants were off shore companies registered in different jurisdictions and were investing indirectly in Oando and therefore not proper investors to complain. They ordered the AGM to go ahead. The AGM is the last approval a company needs to finalize an audit that has been done. Any forensic audit is bringing back the dead and the implications are wide and weighty. Let those who want Oando destroyed be ready for the consequences.
Let me make clear that Oando can defend itself and they are already doing that. My concern is to educate the public on its implications. We are here, because we fail continuously to appoint the right people to positions that are very sensitive and important to the economy. Any one heading SEC should be very competent and understand the implications of actions taken by SEC. Mr. Gwarzo does not know the rules by which the Commission is governed, he has been a bull in a China shop, destroying businesses and throwing out people from work and stranding thousands of investors in the name of clearing the market of infractions. If all the leading firms on Wall Street like Merrill Lynch and Goldman Sacs were closed down for every infraction, there will be no Securities firm on Wall Street today. When there are infractions, they are investigated and punished, without closing down the company and throwing out several employees with thousands of investors overnight. Companies are run by people, and they are the ones to be found wanting and not the companies themselves.
It is on record that Ms. Arunma Oteh’s tenure as Director General of SEC saw the dramatic drop of infractions in the market. She did not go closing down firms and throwing out thousands of employees and frustrating investors. She simply set out clear rules and made it clear she will not tolerate any shenanigans. And the market got the message. Regulating a market is not about styling yourself as the biggest policeman, but in working with operators and the market to nurture it and create enabling environment to grow the industry.
Those who support Mr. Gwarzo should know that he was not qualified in the first place, the opportunity he had to head the commission was mostly misused to victimize those he choose to and was incompetent and bad for the market. We should separate the current fixation with the Oando forensic audit and focus on Mr. Gwarzo’s alleged thievery and infractions to get to the bottom of it and give the appropriate punishment. It is news worthy that on the day Mr. Gwarzo was suspended, the market ignored the news, and closed higher. Confirming that Mr. Gwarzo as Director General of the Securities and Exchange Commission has no impact on the market. The market response was good riddance to bad rubbish.
Hassan Daira
Daira is a public affairs commentator and lives in Abuja.
