My Suspension Was Done In Bad-Fate—Mounir Gwarzo

…Suspension is in order because he breached Public Rules…Adeosun

Embattled Director General of the Securities  and Exchange Commission (SEC), Mr. Mounir Gwarzo has described his suspension by the minister of finance,  Mrs. Kemi Adeosun from the Commission, as one done in bad fate.

Gwarzo made this submission on Tuesday at the hearing being conducted by the House Committee on Capital Market and Institutions.

However, the minister has insisted that Gwarzo’s suspension is in order because he breached Public Rules by having interests in two private companies.

Find below Gwarzo further submission:

Summary of Actions contrary to the Public Service Rules (PSR) and the ISA, 2007

• The Honourable Minister lacks the power to suspend me from service. The appointment into office or removal from office of the Director General of SEC is a power strictly resident with the President of the Federal Republic of Nigeria. This is evident from the provisions of Sections 5 & 8 (1 & 2) of the ISA 2007. The Minsters role is only limited to making recommendations to the President.

• It is elementary labour law that only an employer can suspend an employee, thus bringing to question the suspension by the Honourable Minister.

• It should however be noted that PSR 010101 clearly states that the Public Service Rules shall apply to all officers except where they conflict with specific terms approved by the Federal Government and written into the contract of employment or letters of appointment’.

• It is important at this point to state that my letter of appointment as the SEC Director General specifically referred to the Investments and Securities Act (ISA) 2007 – an Act of the National Assembly as the law governing my conditions of service. Thus all actions relating to my appointment must be in compliance with the ISA as anything outside same would amount to a nullity. As the Ministers duty is just to recommend a candidate to the President who also has to be confirmed by the Senate of the Federal Republic of Nigeria in accordance with the provision of section 5(1) and (2) of the Investments and Securities Act 2007. Nothing in that section vests the Honourable Minister with the powers to suspend the Director General of the SEC.

• PSR 160101 defines a parastatal thus ‘… a government – owned organization established by statute to render specific service(s) to the public. It is structured and operates according to the instrument establishing it and also comes under the policy directives of government’.

In effect, PSR 160101 expressly recognizes that the Securities and Exchange Commission, as a federal government parastatal ‘is structured and operates according to the instrument establishing it’. The instrument establishing SEC is the Investments and Securities Act 2007, expressly also adopted as the governing law by my letter of appointment dated 22 May 2015.

• Furthermore, according to PSR 160103, the PSR would only apply to the SEC DG or any staff of SEC in the absence of any statute, manual, rules, procedures and practices regulating the Securities and Exchange Commission and its staff. In view of this, the action of the Minister against the Heads of Legal and Media of the Commission are also unlawful actions as the Commission has in place laid down policies which apply to cases of such nature.

• More so, PSR 160501 expressly provides that,

“The power to exercise disciplinary control over officers in parastatals is vested in the supervisory Board/Councils in accordance with their respective conditions of service”.

My conditions of service as the Director General of the SEC are as contained in my letter of appointment letter 22nd May 2015 and the Investments and the Securities Act 2007.

Sequence of Interference on Oando Investigation

SEC received a petition from Ansbury Investment Inc and Alhaji Dahiru Mangal, respectively dated 2 May and 4 May 2017 regarding Oando Plc. SEC reviewed the petitions and constituted a technical committee to examine the allegations. The Technical Committee submitted its report to the standing Corporate Governance Committee of the SEC. On 5 October 2017, the standing committee reviewed the report of the Technical Committee and recommended a forensic audit of the activities of Oando Plc based on its finding which included the following;

I. Going Concern of the Company.
II. Suspected Insider Dealings among which is the sale of 1.21billion shares amounting to N21.5billion which were executed before the release of the 2014 accounts. Insider dealing is the illegal practise of trading to one’s own advantage through having access to confidential information.
III. 27 related parties transactions involving Mr Wale Tinubu in which Oando paid between 2012 to 2016 for 7 out of the 27 the sum of over N200billion.
IV. Discrepancies in the shareholding structure.
V. Breach of several SEC law (ISA) and Rules.

On Monday, 27 November 2017 at 11.30am, the Securities and Exchange Commission wrote to OANDO Plc intimating them of its decision to commence the forensic audit and at about 5pm of the same day, the Minister convened a meeting with Dr. Mahmood Isa Dutse the Permanent Secretary FMOF in attendance where she informed me that she wanted the OANDO Plc issue to be concluded and directed that the forensic audit should be stopped. She further verbally directed me to constitute a committee made up of the Heads of Legal of the SEC, FMOF and OANDO Plc (a regulated company) who would compute penalties for the top management of OANDO Plc to pay personally.

The Minister also stated that the directive was based on her position as the SEC Board. Sequel to this, I humbly requested the Honourable Minister to commit the directive in writing as every decision of the Board must be committed in writing. She was upset at the request and stated that she also got a verbal directive from Mr. President. The Minister then said I had 2 options: to either resign or be suspended, reminding and threatening me with, the allegations levied against me. I told her that I would not resign and that having done nothing wrong that I was ready to defend myself. Mr Christopher Gabriel the Director Legal, FMOF joined the meeting and was privy to the conversations.

High Profile Cases handled during the tenure of Mrs Kemi Adeosun

• It is pertinent to note that since her coming into office 2 years ago, SEC had investigated other high profile cases aside the Oando Plc investigation. Some of these cases include the following; BGL Asset Management Company Limited; Oasis Insurance Plc; Ikeja Hotels Plc and Partnership Investments Limited.

• Again, all the steps taken against the above listed companies by the Commission were under my leadership as Director General to protect the integrity of the Securities market and Nigeria’s investment atmosphere against corporate abusive conducts and with the exception of Oasis Insurance Plc there was no interference from the Minister. So why this interest and interference with respect to the Oando Plc investigation?

THE ALLEGATIONS USED AS DECOY TO SUSPEND ME FROM OFFICE AS DIRECTOR GENERAL OF SEC

1. SEVERANCE PACKAGE OF N104,851,154.94 (ONE HUNDRED AND FOUR MILLION, EIGHT HUNDRED AND FIFTY ONE THOUSAND, ONE HUNDRED AND FIFTY FOUR NAIRA AND NINETY FOUR KOBO)

I was appointed a full time member of The Securities and Exchange Commission on 9 January 2013 by the President, Federal Republic of Nigeria. Paragraph 2 of the letter of appointment vide reference F./.2261/S.3/11/71/41 clearly stated that the appointment was governed by the provisions of the Investments and Securities Act 2007 which provides in Section 5(1) that –

‘The Director General and the three full time commissioners shall be appointed by the President upon the recommendation of the Minister and confirmation by the Senate’.

In effect, this was a political appointment, by the President, not a promotion or ‘transition’ from one level of public service to the other within SEC. Section 9(1) Investments and Securities Act 2007 clearly provides that –

‘The Director-General and the three full time commissioners shall be paid such remuneration and allowances as may be determined by the Board of the Commission’.

Accordingly, I was appointed one of the 3 (three) full time commissioners of the Commission entitled by law to be paid such remuneration and allowances as may be determined by the Board of the Commission.

I served as an Executive Commissioner for a period of 2 years and 5 months. I was entitled to be paid the benefits which run with the office occupied by the person. In 2015, I was given a separate political appointment by Mr. President as Director General of SEC. The position of Director General was a separate political appointment that passed through the Senate for confirmation. Separate criteria and qualifications exist in the Investments and Securities Act regarding the offices of Director General distinct from Executive Commissioner. With my appointment as Director General of the Commission I was automatically relieved of my appointment as Executive Commissioner. As at 20, May 2015 when I was appointed Director General by Mr. President, I served as an Executive Commissioner on a separate political appointment.

By a decision of the Board of SEC made on 12 July 2002 (made at least 11 years before I became appointed as an Executive Commissioner of the Commission), the Board of SEC approved severance benefits for the Director-General and Chief Executive of the Commission who leaves office within the first term but has spent a minimum of 2 years in office while in the case of a Permanent Commissioner, the commissioner must have spent a minimum of 2 years in office.

Note that in the case of the DG the benefits only apply to when he leaves office while for the Commissioners it is when they spend a minimum of 2 years in office based on the assumption that they can become DG.

On the issue that the payment should have been approved by the board or the Minister, this is very mischievous because no severance package has ever been approved by the Board or Minster, from 2002 till date there are 10 Executive Commissioners and DG’S that collected their severance packages and none was approved by the Board or Minister. So why is my own an exception?

The letter by the Federal Ministry of Finance dated 3rd January 2018 inviting me to appear before an Administrative Panel set up by the Minister claimed that the payment of the sum of N104,851.154.94 as severance package to me was made to me ‘against the advice of the then Ag. Head of Legal Department’. But the same letter failed or neglected to acknowledge that the advice by the Former Acting Head of Legal Department was reviewed by the Acting Commissioner, Legal and Enforcement who was senior to the acting head of legal both in office and professionally and the Commissioner Corporate services who is also senior to the acting head of legal also disagreed and approved the payment. It should also be noted that the opinion of the then Ag. Head of Legal Department was based on the memo sent by the Board Secretariat to the Board and not on the actual decisions and approval of the Board as contained in its minutes and extract.

The Commission also further set up a committee comprising the Secretary to the Commission, Head, Legal Department, Head of Department, Human Resources Management, Head of Department, Procurement and Support Services to examine the issue of my severance package. After detailed deliberations, the Committee found that I was rightly paid the severance package. .

2. Allegation of being a Director of Medusa Investment Limited and Outbound Ltd.

I resigned my directorship of both companies as far back as 2012 and filled and signed all necessary documents in respect of this which were duly handed over to the companies legal teams as it is their responsibility to ensure that all necessary filings are carried out at the CAC.

From the time I resumed duty as an Executive Commissioner, Operations and Director General, no contract was ever awarded to Medusa Investments Limited to my knowledge or approval. I categorically repeat that Medusa Investments Limited did not render any service(s) to SEC during my tenure. I am not a signatory to any bank account of Outbound Limited and have NEVER had any business or financial relationships relationship.

Some Pertinent Questions:

I. Why did the Minister refuse to take interest in the petition filled with the Ministry since January 2017 until the issue of the forensic audit of Oando was announced in October 2017?
II. Why did it take 48 hours for the Ministry to suspend me meanwhile I submitted my response to the query almost 3 weeks before?
III. Why did the Minister threaten me to either resign or be suspended at the meeting of November 27th, 2017?
IV. Why did the Minster refuse to see me in order to hear my own side of the story after Sahara Reporters published the petition?
V. Why did the Minster at my first meeting with her after announcing the forensic audit state that someone had suggested that I should be sacked?
VI. Why did she take interest in Oando but did not in the case of BGL Plc, Partnership Plc and Ikeja Hotels Plc?
VII. And why did she take interest in Oasis Insurance Plc (chaired by Mr. Adenrele Tokunbo Kehinde and Mr. Babatunde Oshadiya as MD)?

Conclusion

(i) I strongly believe that anybody or group of persons that do not want a forensic audit to be undertaken on Oando Plc does not believe in the anti-corruption war of Mr. President.

(ii) The forensic audit is yet to take place almost two months after my suspension and more than four weeks after Mrs. Kemi Adeosun told the nation that the exercise will commence. There is no court order as at today restraining SEC from undertaking the exercise. Oando has filed an appeal at the Court of Appeal and the matter is yet to be heard not to talk of issuing any order and SEC only obeys court orders and not filling of papers as was the case in Gombe Bond, BGL and Partnership, and the board of the Nigerian Capital Market Development Fund has since approved the engagement of the investigators and also approved the sum of N160million for the exercise. Therefore, SEC has no right to vary the decision of the Board and no reason not to continue with the forensic audit.

(iii) Oando is a public listed company with 274,000 shareholders and they have the right to know the true financial state of their company.

(iv) Accordingly, there was no basis for the suspension meted out to me by Mrs Kemi Adeosun. Very respectfully, I plead that I should be reinstated and the Minister should tender an apology to me for the damage she has caused me.

Finally, as a regulator, I do not have a political platform and as such, Black, White, religious and secular, rich and poor, man and woman, disabled and able are all equal in my eye and should be treated fairly as humans.

I therefore, view my office as a mission and not a job and I believe there are two choices: 1. Investigation on Oando to be carried out and the integrity of SEC and the market is maintained or no investigation on Oando and the integrity of SEC and the market is rubbished.

It is not about Mounir Gwarzo but SEC, the Nigerian Capital Market and Nigeria. DG’S come and go but SEC and Nigeria will remain.

I thank you for the opportunity and God Bless Nigeria.