Minister of Finance Mrs Kemi Adeosun unearthed a previous petition against Mounir Gwarzo and suspended him as Director General of the Securities and Exchange Commission [SEC] because he demanded to be served in writing with her order to stop SEC’s forensic audit of Oando Plc, Daily Trust learnt from informed sources and official documents in Abuja yesterday. Adeosun, who said she was giving the order in her capacity as the Board of SEC, implied that it was President Muhammadu Buhari who wanted the Oando inquiry stopped because she said the president did not give her orders in writing. When Gwarzo insisted on a written order, the Finance Minister said he too had a petition written against him and that she would suspend him in order to allow for a full investigation.
The straw that broke the camel’s back was a November 27, 2017 letter that SEC’s Head of Legal Department wrote to Oando’s Group Chief Executive Officer Mr. Adewale Tinubu, cousin of APC National Leader Asiwaju Bola Tinubu. SEC informed Tinubu that it had appointed five firms including Akintola Williams Deloitte, United Securities, Nasiru Muhammad and Co, SPA Ajibade and TJADAF Consulting and Associates to undertake a forensic audit into the oil firm’s affairs. The audit, among others, is to determine Oando’s financial health, determine if there was insider trading in the company’s stock in 2013-15, determining the accuracy of its shareholding records and review its assets disposals and the purchasing parties, among others.
According to the documents that Daily Trust obtained, trouble for Oando began when SEC received petitions from Ansbury Investments and Dahiru Barau Mangal alleging going concern of Oando, insider dealings, acquisitions of subsidiaries without SEC approval, misstatements in the company’s audited financial statements, declaration of dividends from unrealised profits, violation of SEC rules on remittance of dividends to registrars, related party transactions and discrepancies in Oando’s shareholding structure, among others. After its initial findings, SEC ordered a forensic audit and ordered the Nigeria Stock Exchange to suspend trading in Oando’s shares. The oil firm went to court on October 24 to try to stop both the forensic audit and suspension of trading in its shares but a Lagos Federal High Court judge threw out the case on November 23.
A day later, on November 24, according to the documents, top Finance Ministry officials led by the permanent secretary met with the SEC DG and approved that the forensic audit of Oando should go ahead. Three days later however, on November 27, Minister of Finance Adeosun summoned Gwarzo to her office and ordered him to discontinue the forensic audit of Oando. Instead, she said SEC should impose a penalty on Oando. Mounir Gwarzo demanded that the Board order be given to him in writing. He also wrote a memo to the minister the next day, November 28 highlighting the dangers of discontinuing the probe of Oando, which he said would render SEC impotent in dealing with all transgressions in the securities sector. It was at this point that Adeosun resurrected a petition and suspended Gwarzo from office pending a probe of the allegations against him.
Daily Trust also examined several documents to do with the allegations against Gwarzo. Permanent Secretary in the Finance Ministry Mahmoud Isa Dutse had on November 3, 2017 served Gwarzo with a query regarding the allegations. They include that SEC paid him N104m severance package at the end of his tenure as SEC executive commissioner even though he remained in SEC’s service as director general; that he is a director in Medusa Ltd despite being a public officer and that he awarded contracts to the same firm as DG of SEC. The petition also alleged that Gwarzo recruited staff without following proper procedure and that he received kickbacks from contractors.
In his reply dated November 5, Gwarzo said he quit his directorship of the family firm Medusa in 2013 when he went to SEC, that Medusa never got any contract from SEC during his tenure, that he followed all due process in recruiting staff and that he never collected kickbacks from contractors. Gwarzo however admitted that he collected the severance pay for his earlier service as Executive Commissioner, Operations based on a SEC Board decision of July 2002. A committee made up of SEC’s heads of legal, human resources, finance and procurement had last March determined that Gwarzo was entitled to the severance pay based on the wording of the Board decision of July 2002. SEC’s Executive Commissioner Corporate Services and Executive Commissioner Legal and Enforcement made the same interpretation in 2015 before Gwarzo was paid. They however recommended that in future the Board should amend the resolution so that only officers that exit SEC completely should be paid. They said the Board did not envisage a situation whereby an Executive Commissioner could become the director general.
An informed source told Daily Trust yesterday that it remains to be seen if the Acting Director General of SEC, to whom Gwarzo handed over the commission’s affairs last week, would now stop the forensic audit of Oando Plc and instead impose a penalty as Mrs. Adeosun is demanding, allegedly at the behest of the President. The source, who is a capital market insider, said this promises to be one of the biggest scandals in Nigeria because it would render a powerful regulator toothless. He said SEC had previously probed and punished many quoted companies for similar infractions and that if Oando gets away with a slap on the wrist, SEC would have no moral authority to deal with similar infractions in the future.
Adviser, Media, Mr Oluyinka Akintunde the minister said Mr Gwarzo was suspended for flagrantly violating the Public Service Rules and to allow for unhindered investigation of some allegations made against him by an Administrative Panel of Inquiry.
“The Administrative Panel of Inquiry was set up by the Honourable Minister of Finance, Mrs. Kemi Adeosun to look into the allegations of payment of severance package of over N104 million to himself and award of contracts to companies he is related to, which results on conflict of interest.”
He said Minister has never interfered in the operations of the agencies under the Ministry of Finance.
Source: Daily Trust
