Oteh, our boss, lied – SEC’s top executives

Director-General, Securities and Exchange Commission, Ms. Arunma Oteh

Executive Commissioners and Directors of the Securities and Exchange Commission confirmed on Wednesday that there was rot in the commission. They accused the Director-General, SEC, Ms Arunma Oteh, of taking unilateral decisions and said there was an almost total breakdown of communication among the members of staff.

They appeared before the House of Representatives ad-hoc committee investigating the near-collapse of the Nigerian Capital Market on Wednesday.

Oteh, who failed to appear before the panel on Tuesday, was compelled by the panel to do so on Wednesday. She, however, apologised for her action before the hearing began.

“I apologise profusely if an impression was created that I was disrespectful to the committee,” she pleaded, adding that she opted to attend the meeting of the Economic Management presided over by President Goodluck Jonathan.

The SEC management told the panel that though decisions were carried out with the impression that they had the approval of SEC executive management team, Oteh hardly involved them in her policies and decisions.

The panel had sought their views on how to address the “dysfunction and absence of coordination in SEC.”

They also told the Ibrahim El-Sudi-led panel that there were mutual suspicion, distrust and low staff morale in the apex regulatory agency of the capital market. They accused Oteh of hiring and placing contract staff above some key directors.

No meetings

The Executive Commissioner, Operations, Mrs. Daisy Ekineh, who had spent 30 years in SEC, told the panel that members of the management team rarely met to take decisions or discuss issues since Oteh came in in 2010. She said meetings in SEC were either conducted through text messages or electronic mails.

She said this was done to avoid face-to-face meetings due to the distrust and lack of cohesion in the agency.

Ekineh stated, “In the past, when (Musa)Al-Faki and other DGs were there, we met regularly to deliberate on issues.

“Unfortunately, this has been lacking lately. As a way forward, we need to do more in terms of communicating with each other.

“The way we go about it now is not working; we need to do more face-to-face communication, instead of using text messages and e-mails.

“Also, there should be respect for all. The head should be respected and those under the head deserve their own respect as well.”

Contract staff

The Executive Commissioner, Legal, Mr. Charles Udora, said the low staff morale at SEC was caused by the DG who sidelined regular staff, and hired “contract staff” to handle sensitive assignments.

“The contract issue is affecting morale; the system is creating disaffection.

“People are brought in through wrong processes and occupy positions they know nothing about,” he added.

He stated, “The moment we recognise our staff, SEC will fly again.”

The Director of Legal Services and Secretary to the commission, Mr. Edosa Eigbekaen, lamented the absence of any “structured agenda for meetings” at the commission.

The commissioners and directors testified in the presence of Oteh, who also made submissions to the panel.

They all denied knowledge and involvement in three major management decisions Oteh took, which she claimed that they jointly approved. One was the seconding of two Access Bank employees to SEC to serve as advisers to Oteh.

A member of the panel, Mr. Bimbo Daramola, had sought to know whether the appointments would not compromise SEC role as a regulator since the bank was a key market player.

He also asked whether there was an approval by the management of SEC.

The DG told the committee that she discussed the matter at several management meetings with the directors where they agreed that SEC could use outside assistance in areas the existing staff lacked the competence.

“Yes, I discussed it with them as part of the broad-based areas that we might need assistance,” she said.

The commissioners and directors however, said the DG never discussed the issue with them.

Expressing shock over the revelation, El-Sudi said, “Your reform to achieve a world-class capital market regulation will have problems if schedule officers feel that they have been sidelined or slighted,” he noted.

Project 50

Oteh and the commissioners also disagreed on the controversial “Project 50″ event held in 2011 to commemorate 50 years of capital market regulation in Nigeria.

While Oteh told the committee that the management team discussed and approved the project, the commissioners again denied knowledge of how it was planned and executed.

A panel member, Mr. Buba Jibril, asked Oteh to name the sponsors of the project and how much was realised.

She replied that there were no donations in respect of the project, but that “project partners” handled specific aspects of the project.

Oteh said SEC, being one of the partners, used its tender’s board to execute its own part at the cost of N42.5m.

She also admitted being the “current chairman” of the project committee, having taken over from Mr. Sylvester Akele who had retired from service.

“There were no donations to SEC but there were partners that funded various aspects of the celebration. SEC funded its own part,” she stated.

Under pressure, Oteh listed the Central Bank of Nigeria, the Federal Ministry of Finance, the Ministry of Trade and Investments, Association of Issuing Houses and “several other private sector players” as the partners for the project.

She declined to speak on what the partners funded.

The panel directed her to furnish it with the names of all the partners and the details of the projects they funded.

Daramola had read a memo from the CBN indicating that it would only make donations to SEC’ account and not a third party account.

Oteh clarified that the memo originated from an officer, who probably thought that there would be donations toward the project.

Incidentally, the Bureau for Public Procurement queried whether SEC paid for a venue for Project 50 at the Transcorp Hilton Hotel, Abuja.

The BPE, according to Daramola, wrote SEC, asking for the details of the transaction.

But, when the panel sought to know whether SEC had replied the query, Oteh said that she needed to confirm whether the agency had responded.

Shortly after assuming duties, Oteh released a “Road Map to World-Class Document,” a policy on how she planned to transform the market.

When asked whether she attended any meeting where the document was discussed, Ekineh replied, “We never met to consider the road map.

Udora said, “I have not made any input into any road map and there was no discussion on this by the executive management team.

“It is at this hearing that I am being told that I was part of such a meeting.”

The Executive Commissioner, Finance and Admin, Mr. Sani Stores, responded, “I have never been involved in this framework and I have never seen it.”

The secretary to the commission, Aigbekaen, said he was not aware of the document.

On the thorny issue of 37 contract staff, the Director of Human Resources, Mr. Hussaini Dauda, told the panel that though using contract staff was the discretion of a DG, due process must be followed or it would be illegal.

He said Oteh was advised to forward the matter to a meeting of the management for deliberation and to further seek the approval of the board but that the management, headed by Oteh, neither deliberated on the matter nor approved it.

While the appointments of the contract staff were still to be formalised, he said that they were already earning salaries and allowances.

However, Oteh said that she used her discretion to engage the staff to assist her execute her transformation agenda, while taking steps to formalise the process.

N16bn loan

The panel attempted to resolve the allegation that the managing director and the deputy managing director of Access Bank took personal loans totalling N16bn from Intercontinental Bank before Access Bank acquired the latter in 2011, but made no headway.

Mr. Ini Udoka, who raised the question, noted, “It was a case of owing me money, I became bankrupt and you acquired me.”

Oteh simply responded, “I am not aware.”

She also declined further comments on the transaction, promising to look at the books again and get accurate information to the panel.

However, Udora spoke on how the Union Bank was acquired.

He informed the panel that SEC initially opposed it because it was aware that the bank floated shares in the market and got N8bn but did not explain how the money was spent. However, the Asset Management Company of Nigeria later wrote SEC to say that the N8bn would be absorbed as Union Bank’s losses.

“AMCON wrote us to assume responsibility for the loss. I felt that it was absurd for AMCON to assume the loss.

“I personally felt that somebody must account for that money,” he added.