30 November 2017

Nigeria: Govt Suspends SEC DG Over Corruption Allegations

The Federal Government has suspended the Director-General of the Securities and Exchange Commission (SEC), Mr. Mounir H. Gwarzo, from office over allegations of corruption.

The Minister of Finance, Mrs. Kemi Adeosun, in a statement Wednesday said Gwarzo's suspension was to allow for an unhindered investigation of several allegations of financial impropriety levelled against him..

The statement, signed by Patricia Deworitshe, the ministry's Deputy Director, Press, said the suspension is in line with the Public Service Rules (PSRs) 03405 and 03406.

"The Honourable Minister has set up an Administrative Panel of Inquiry (API) to investigate and determine the culpability of the director general.

"She has directed the suspended SEC director general to immediately handover to the most senior officer at the commission, pending the conclusion of investigation by the API", the statement said.

Suspended along with Gwarzo are two management staff of the commission - Mr. Abdulsalam Naif Habu, Head of Media Division and Mrs. Anastasia Omozele Braimoh, Head of Legal Department - who are also alleged to have engaged in financial impropriety in the commission.

Although Gwarzo's suspension was made public after the close of business at the Nigeria Stock Market yesterday, investors may react to the news negatively today and there could be panic in the market which will in turn affect trading.

Speaking with our reporter on phone yesterday night, a capital market expert, Malam Attahiru Maccido, said the market would definitely react to the news of suspension negatively when trading commences today.

Maccido, who is one of the experts at the Abuja-based Buraq Capital Limited, also said the negative trend might likely drag till tomorrow.

"What and what the government and other stakeholders do in the next few hours or even days will determine when the negative trend will end," he said.

Another expert who pleaded anonymity said: "Investors will surely express concern over the suspension because of fraud allegation against the Director General of Securities and Exchange Commission (SEC), Mounir Gwarzo. How exactly the market will react, sincerely, I can't say but the reaction will definitely have a multiplier effect on the market."

Daily Trust reports that the suspended director general was alleged to have perpetrated a variety of fraudulent activities since his appointment by former President Goodluck Jonathan for a first term of five years on May 22, 2015.

Prior to being appointed successor to Ms. Aruma Otteh as SEC Director General, Gwarzo was an Executive Commissioner at the commission.

An online newspaper, Sahara Reporters, said it obtained documents exclusively, outlining series of financial improprieties allegedly committed by Gwarzo.

The paper said on May 26, 2015, four days after receiving his letter of appointment, Gwarzo requested that he be paid the sum of N104.8 million as severance package in respect of the end of his appointment as executive commissioner, a position he occupied for two years and four months.

It said: "The request, made via a memo dated May 26, 2015, was referred to Mr. Chukwuogor Frana, acting Head of the commission's Legal Department, for consideration and advice.

"Responding in a memo dated May 27 2015, Mr. Frana advised against honouring the request made by Mr. Gwarzo, arguing that the fact that he remains in the employ of SEC disentitles him to a severance package.

"Citing an extract of the SEC board meeting held on July 11, 2002, Gwarzo had argued that he was entitled to a severance package.

"While offering advice matters," Mr. Frana wrote, "The extract, however, does not contain the term 'severance benefits.' Therefore, to give an opinion on this matter, it is impossible to determine the purpose and scope/application of this extract."

"Mr. Frana also drew attention to the fact that the opening line of the extract relied on by Mr. Gwarzo simply stated that the SEC management made submissions for the payment of retirement/resignation benefits to political appointees.

"He argued that while the policy specifies political appointees as director general and full-time commissioners, the words "resignation and retirement" appear to restrict the circumstances in which certain categories of persons could benefit from the policy,"it said.

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