On December 3, 2017, Minister of Finance Mrs. Kemi Adeosun sacked the Director General, Securities and Exchange Commission (SEC) Mr. Mounir Gwarzo, over alleged misconduct and abuse of office. However, industry watchers accuse the minister of sacking Gwarzo over his interventions in Oando Plc.
The SEC under Gwarzo had technically suspended Oando's shares over alleged market infractions and set up a panel to investigate Oando. A consultant Delloit was appointed to audit of Oando's operations. Oando and some shareholders would later go to court. They eventually withdrew the court cases to allow for the audit that has still not been completed.
When Gwarzo was sacked, the minister appointed Dr. Abdul Zubair, as acting Director General SEC, a position he held until April 13th when he was unceremoniously removed. He was also queried by the minister before he was removed and redeployed to his former department, external relations, as a director.
Mrs. Adeosun appointed Ms. Mary Uduk as the Acting Director-General of the commission.
The minister also queried the commission and requested a "formal explanation from the SEC of the recent communications between the commission and the Nigerian Stock Exchange (NSE), which adversely impacted market confidence" Mr. Oluyinka Akintunde, the Special Adviser, Media & Communications said in a statement on Friday.
The communication the minister referred to was a letter to the management of NSE lifting the technical trading suspension on SEC. Within the same day, SEC reversed itself, leaving the market a bit confused.
Credible sources told our correspondent that the minister wasn't happy about the confusion and wouldn't take any excuse hence the sack of Dr. Zubair. But following two interventions in SEC in five months, industry watchers are worried over the independence of the commission as a regulator.
Commenting, Mr. Kasimu Garba Kurfi, MD/CEO Apt Securities and Funds Limited, said "the intervention is good to ensure foreign investors' confidence. The sudden removal, suspension and restoring within the short span however raised doubt on the integrity and confidence of the authority of the exchange. The recent intervention is in good faith by the minister," he noted.
However, Rislanudden Mohammed, a former acting MD/CEO, Unity Bank, said the interventions will no doubt paint a picture of a regulator that is under political control.
"Of course the minister's interventions will impact market confidence. There seems to be a lot of politics about economic issues. Whatever action the government takes on the regulator, it impacts the market positively or negatively. The picture now is that there is no stability in the market. Foreign investors are also watching closely developments in the industry," he said.
According to him, the several interventions go to show how independent SEC is and this isn't good for the market as the market is highly sensitive.
On the status of Oando, he said there was a bit of concussion. "We don't know the state of the investigations. But the steps the former DG, Mr. Munir Gwarzo took by setting up a panel to investigate Oando was the right thing to do," he said.
On appointment of a SEC DG, he said the ideal thing was that the President appoints the SEC DG and the National Assembly confirms the appointment but that isn't happening.
Meanwhile, shareholders are calling for the minister of finance's head over the Oando saga.
The shareholders of Oando Plc describe the minister's interventions as "unwholesome interference" in the nation's capital market and "unnecessary meddling" with the functions of the Securities and Exchange Commission (SEC), which "has caused severe damage" to the capital market.
The National President of Trusted Shareholders Association of Nigeria (TSAN), Alhaji Mukhtar Ismail Mukhtar, the National Coordinator, Proactive Shareholders Association (PROSAN), Mr. Taiwo Oderinde; and the Coordinator, Oando Shareholders Solidarity Group (OSSG), in a joint statement also accused the minister of attempts to shield Oando from probe. They also demanded for her immediate sack by President Buhari.
"We wish to bring the attention of His Excellency President Muhammadu Buhari, Vice President Yemi Osinbajo and all Nigerians to the unwholesome, unpatriotic and strange actions of the Minister of Finance, Mrs. Kemi Adeosun, with regards to the probe of Oando Plc.
"You may recall that since early last year, Oando has been enmeshed in series of crises bordering on abuse of corporate governance and alleged gross financial mismanagement.
"The internal auditors of Oando Plc, Messrs Ernst & Young, in the company's financial report last year expressed doubts over its ability to continue as a going concern because its liabilities exceeded its assets.
"As concerned shareholders, we sent petitions to the Securities and Exchange Commission (SEC) and to the House of Representatives Committee on Capital Market.
"The committee mandated SEC to investigate these allegations, culminating in the setting up of a committee by SEC to carry out a preliminary investigation of the company's affairs.
"SEC's preliminarily investigation, as disclosed by the commission in a letter dated October 17, 2017 signed by its Head of Legal unit, Braimoh Anastasia, unearthed several malpractices in the company. These include insider trading, decoration of dividends from unrealised profits, release of false financial statements to the public and disposal of assets without the knowledge of the regulatory body in contravention of the Investment and Securities Act (ISA) 2007, among several other infractions.
"These weighty findings compelled the suspension of Oando shares on the floor of the Nigerian Stock Exchange (NSE) and the Johannesburg Stock Exchange (JSE) to pave way for a more thorough investigation via a forensic audit ordered by SEC," the National Coordinator, Proactive Shareholders Association (PROSAN), Mr. Taiwo Oderinde, said.
Oderinde said unfortunately, the forensic audit has been stalled due to the "unwholesome interference by Mrs Kemi Adeosun to the detriment of Oando shareholders and the entire Nigerian capital market."
He accused Adeosun of suspending Gwarzo and Zubair because they resisted her plan to shield the management of Oando from probe.
"It must concern Mr. President, Mr. Vice President and all Nigerians that Mrs. Adeosun has now removed two SEC DGs from their positions all in a desperate attempt to shield Wale Tinubu and the present management of Oando from probe" he said.