The Administrative Panel of Inquiry into allegations of violation of Public Service Rules by suspended Director-General (D-G) of the Securities and Exchange Commission (SEC) Mr. Mounir Gwarzo, has recommended his dismissal from public service.
He is to be “dismissed from public service of the federal government for holding the position of a Director in private companies (Medusa Investment Limited and Outbound Investments Limited) while serving as the Director-General of SEC in breach of Public Service Rule (PSR) 030424, PSR, 030402 and Section 6 of the Investments and Securities Act, 2007,” it was recommended according to a presidency sources.
In addition, the panel headed by the Permanent Secretary of the Federal Ministry of Finance, Alh. Mahmoud Isa-Dutse, recommended that Mr. Gwarzo should refund the N104, 851, 154.94 which he illegally collected as severance package from SEC. Sources said that it was recommended that Mr. Gwarzo be referred to the Independent Corrupt Practices and Other Related Offences Commission (ICPC) for further investigation of the allegation of using his position as Director-General to influence the award of contracts to Outbound Investments Limited in view of provisions of Sections 57 (12) (b) and 58 (5) of the Public Procurement Act, 2007. On the other senior staff: Mrs. Anastasia Braimoh and Mr. Abdulsalam Naif, who ran into trouble along with Mr. Gwarzo, the panel recommended that they be referred to SEC for appropriate disciplinary actions, in line with the provisions of the Staff Manual of SEC.
Within a week of his appointment as D-G of SEC in May, 2015 Mr. 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. The request, made via a memo dated May 26, 2015, was referred to Mrs. Chukwuogor Franca, then acting Head of Legal Department. It was learnt that Mrs. Chukwuogor advised against honouring the request made by the then DG, as according to her, the D-G was still working in SEC.
In spite of the legal advice, Mr. Gwarzo had his way. On his breach of PSR by holding his position as director in two private companies while working in SEC, the panel, as learnt obtained Corporate Affairs Commission (CAC) documents which indicated that Mr. Gwarzo was still listed as a shareholder as at November 7, 2017. It was learnt that the former D-G told the panel that he resigned his directorship of the said companies in 2012, contrary to CAC documents.
It was equally established that he was still a signatory to the bank account of Medusa Investment Limited with one of the new generation banks, as at the time the panel was sitting. “When the panel confronted Mr. Gwarzo with copies of letters dates 24 July, 2015 (Request for Change of Account Officer) and that of 16th August 2016 (Request for Naira Credit Card for Directors of Medusa Investments Limited) he admitted to have authored and signed the said letters , but claimed that it was a regrettable action,” it was learnt.
The ruling is coming after the feud between Oando Plc and one of the shareholders of the company, Alhaji Dahiru Mangal over shareholding structure has come to an end following the intervention of Emir of Kano, Muhammadu Sanusi II, on the matter recently. Meanwhile, at the public hearing on the conflict between Minister of Finance and the suspended Director General of SEC, organised by House of Representative Committee in Capital Markets and other Institutions, Adeosun told the Committee chaired by Rep Tajudeen Yusuf, PDP, Kogi that “Munir remains suspended and I’m sending my recommendations to Mr. President today (Tuesday).” Gwarzo through his Counsel, GUK Igwe, SAN, in his submission had also noted that the Minister does not have such a right to suspend the DG.
The Finance Minister explained that the Ministry approved the Commission’s recommendations on the technical suspension of the shares of Oando Plc, which was forwarded barely a week after the suspension was imposed on the oil firm. While responding to Gwarzo’s allegations bothering on having shares in Oando Plc as levelled against her, Adeosun, dismissed the report, saying that she has no shares nor does any member of her family has single share in the oil company.
On his part, Christopher Gabriel, Head of Legal Services in Federal Ministry of Finance contended that Gwarzo’s interests contravened the Code of Conduct for Public Officers set out in the 5th Schedule of the Constitution, Section 311 of the Penal Code Act and Section 19 of the Corrupt Practices and Other Related Offences Act. He said contrary to the position of Gwarzo that the “Minister cannot suspend him, technically she can suspend SEC DG. Speaking earlier, Munir Gwarzo, the suspended SEC Director General alleged that the Minister, who had earlier queried him over the proposed forensic audit of Oando Plc, eventually approved it. Reacting to allegations bothering on corrupt practices and other related offences , Gwarzo admitted being a director and shareholder in Outbound Investment Limited, Northwind Environmental Services and Micro-Technologies Nigeria Limited.
It was alleged that Gwarzo diverted to personal use vehicles belonging to SEC despite collecting N84.3 million as monetized allowances for four cars, an action that is in breach of the Code of Conduct for Public Officers, Section 311 of the Penal Code Act and Section 19 of the Corrupt Practices and Other Related Offences Act. Meanwhile, in his opening remarks, Yusuf Tajudeen, chairman, House Committee on Capital Market and other Institutions noted that the lingering risks if left unchecked may impact negatively on the capital market, hence the prompt intervention of the House to promote mutual harmony and investment drive into the economy. He assured all parties that the Committee will be fair, firm and frank when and where necessary.
Oando, Mangal settle case over shareholding
The settlement between Oando and Mangal may bring some respite to minority shareholders who had been seeking for improved share value as well as to the company, who had spent greater part of 2017 defending its business and reputation. However, the SEC is yet to rescind its decision to discontinue a proposed forensic audit on the company as well as the lifting of a technical suspension placed on Oando’s shares on the Nigerian Stock Exchange, NSE.
How the crisis started
Oando and its leadership team ran into crisis last year when Mangal and one of the founders and majority shareholders of Intels Nigeria Limited, Mr. Gabriele Volpi, moved against the Group Chief Executive Officer of the company, Wale Tinubu, over the control of the company, share ownership, citing mismanagement, cooked books and huge debts. Mangal and Ansbury Inc., a firm set up by Volpi, had written separate petitions to SEC seeking for the sack of Tinubu and the entire management team of Oando. Ansbury and Mangal had also asked SEC to stop Oando from going ahead with its Annual General Meeting, AGM last year. However, SEC allowed the company to hold its AGM, saying the meeting would not stop it (SEC) from carrying out further investigations into the company’s affairs. Barely six weeks after the AGM, SEC wielded the big stick and ordered that the NSE should place the shares of Oando on a technical suspension.
The technical suspension was replicated on the Johannesburg Stock Exchange where Oando has a dual listing. Citing several infringements, SEC also announced the appointment of a team of professionals made up of auditors, lawyers, stockbrokers and registrars to undertake a forensic audit of Oando’s affairs. SEC, noted that it carried out a comprehensive review of the petitions and found: breach of the provisions of the Investments & Securities Act 2007; breach of the SEC Code of Corporate Governance for Public Companies; suspected insider dealing; suspected related party transactions not conducted at arm’s length and discrepancies in the shareholding structure of Oando Plc among others. According to SEC, these findings are weighty and therefore need to be further investigated.
Meanwhile, owing to the interference of the Minister of Finance, Mrs. Kemi Adeosun, who chairs SEC and whose ministry superintends the commission, the forensic audit has still not been carried out. Instead, the then director-general of SEC, Mr. Mounir Gwarzo, who had insisted on the audit, was suspended by the minister. Reacting, Gwarzo said that his suspension by Adeosun was as a result of his refusal to stop the forensic audit of Oano Plc. But Adeosun debunked the claim, saying Gwarzo’s suspension was to allow for unhindered investigation of corruption allegations against him.
Oando reactions to SEC’s actions
Oando said SEC’s directives are illegal, invalid and calculated to prejudice the business of the company. Dissatisfied with the most recent actions taken by SEC and to safeguard the interests of the company and its shareholders immediately, Oando filed a suit at the Federal High Court (FHC), Ikoyi, Lagos, against SEC and the NSE. On Monday, October 23, 2017 the company obtained an ex-parte order from the FHC granting an interim injunction, via an order restraining the NSE from effecting the directive of the SEC to implement a technical suspension of the shares of the company, and an order restraining the SEC from conducting any forensic audit into the company’s affairs pending the hearing and determination of the matter.
According to Oando,NSE and SEC were served with the court order on Tuesday, October 24, 2017 and the NSE and the SEC were legally obliged to comply with the interim orders pending the substantive determination of the suit. Oando had raised questions as to why the commission has investigated a petition brought on by an indirect shareholder (Ansbury Inc.) domiciled outside Nigeria, in a jurisdiction outside the SECs purview and one currently in arbitration court in the United Kingdom when SEC’s Complaints Management Framework stated it shall not consider any matter which is currently in arbitration.
Furthermore, in a letter to Oando, the SEC re-categorised the petitioner as a “whistle blower”, contrary to its former position as a “shareholder”, which according to Oando shows a clear bias as it suggests SEC re-categorised the petitioner’s position to ensure it is able to carry on investigating the petitions.
Oando stated that the most recent action taken by the regulator confirms that the commission appears to be working to its own conclusion rather than looking at the facts before it, and acting in the best interests of the company and the minority shareholders whom it claims it seeks to protect. The company added that it does not believe that SEC has presented a strong enough case to support the engagement of a forensic auditor( Vanguard).
