But sources close to Gwarzo faulted the minister, citing the timing of the suspension, orchestrated meetings on Oando at the instance of the minister, eyewitnesses and earlier communication from Gwarzo to Adeosun.
Adeosun spoke to reporters in Abuja in response to media reports, suggesting that Gwarzo’s suspension was on account of “his refusal to stop the forensic audit of Oando Plc”.
According to her, it was the threat of blackmail that strengthened her resolve to suspend Gwarzo and allow the administrative panel of inquiry to proceed with its probe.
She said Gwarzo personally delivered the memo, using the SEC staff seconded to the office of the minister, in breach of normal procedures for the receipt of mail, noting that the copy of the memo in her possession was delivered with a message that any action against Gwarzo would result in same being leaked to the press.
“ Gwarzo’s suspension is in line with the Public Service Rules (PSRs) to allow for an unhindered investigation of serious allegations of financial impropriety against him. Some of the allegations with documented evidence include the awards of contracts to companies related to him and members of his family. Based on the evidence from that further work and creditable reports that documents were being unlawfully removed from the SEC, as well as consultations with the Economic and Financial Crimes Commission (EFCC), the decision was taken to suspend Gwarzo,” Adeosun said.
She dismissed as false, the insinuation that she issued an “instruction to discontinue with the Oando case,” saying “ this can be corroborated by the other parties at that meeting and by subsequent events”.
According to her, Gwarzo was queried on November 3, 2017, and he responded on the 7th and based on that response, she asked for more investigations to be done because he gave some responses to some issues that were unsatisfactory, so they asked for further investigation to get certain facts from the CAC and banks based on the evidence.
“It became clear that we would need to conduct an API and therefore the laws of the Public Service say he has to be suspended. Now his responses to the query of the 3rd were raised with him on Monday where he was asked to clarify matters. He was reminded that he said this, but we have evidence to another effect and it became very clear from the inadequacies of his response that he would be suspended,” Adeosun said.
She was emphatic she never directed Gwarzo to stop his investigation into Oando.
“In fact, as I have said earlier on in my statement in October when the original suspension of Oando took place, we had a group meeting with the leadership of the SEC, not just Mr. Gwarzo, but all of his team, and they presented very clear evidence that Oando had a case to answer, and we were satisfied with that and we made our position clear,” Adeosun said.
She said the suspension would not in any way impact negatively on investors’ confidence in the capital market, assuring that shareholders have nothing to fear.
“I earned my living all my life from the capital market until I entered the public service. I was a capital market operator. The capital market runs on confidence and transparency. It’s a very important market. The SEC is not an individual. It is an institution and a very important one which must be upheld,” Adeosun said.
Gwarzo had claimed in a letter that the minister directed him to suspend the announced forensic audit of Oando and to settle the Oando issue without due investigation. Similar claims were reiterated by sources in the know of the undercurrents of meetings between the minister and Gwarzo and Oando and other parties prior to the suspension.
They raised four posers for the minister: the petition was submitted in January 2017, some 10 months before Gwarzo’s insistence on the forensic audit of Oando; what delayed the minister from acting since then? At the meeting claimed by Gwarzo were two other senior officials of the Ministry of Finance, Permanent Secretary and Director of Legal Services; will they testify on oath? Between January 2017 and October, the minister did not raise the issue of the petition with Gwarzo, and when an online medium unearthed the petition again, Gwarzo, on the second day, wrote to the minister, providing explanations on the allegations. Does the minister have the power to suspend Gwarzo given extant rules and the fact that the investigating agencies- the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Related Offences Commission (ICPC)-had not established a prima facie case of criminal conduct against Gwarzo?
In a letter titled “Investigation of Oando Plc”, Gwarzo had indicated that the minister was interfering in the Oando’s investigation and wanted the announced forensic audit to be suspended.
In the letter, Gwarzo wrote that: “Pursuant to our meeting on the above subject held on Monday, November 27, 2017, I am compelled to advise you ma, on the implication of the verbal directive issued to me in which you stated that the SEC should discontinue the forensic audit on Oando Plc and hold a tripartite meeting with legal officers of the commission, Oando Plc and the Federal Ministry of Finance with the purpose of coming up with penalties which would be issued to top officials of Oando Plc in their personal capacities for payment.
“Honourable Minister, it is important to stress that an action such as that proposed above would definitely put to question the independence and integrity of the commission, while also completely eroding the confidence of both local and international investors in the Nigerian capital market.
“Furthermore, as you may be aware, the activities around the investigation of Oando Plc are being closely monitored by the local and global investment communities and they eagerly expect the outcome of the exercise.
“It is, therefore, not in the best interest of our recovering economy that the forensic audit is not seen to be conducted in an independent and transparent manner proposed by the commission.
“It would interest you to note ma, that the commission has in the last three years embarked on firm enforcement actions against some so-called ‘top capital market stakeholders’ in the Nigerian capital market.
“Remarkably, these actions have sent strong signals to the entire capital market community and have led to an 87 per cent reduction of infractions in the market within the period.
“One major infraction alleged against Oando Plc is financial mismanagement. Honourable Minister, given that the consequent effect of such allegation is being borne by the over 274,000 shareholders of Oando, it is only proper that a process which would reveal the status of this allegation to ascertain its veracity or otherwise be embarked upon in a transparent manner.
“This, in my opinion, would put to rest the question of how the shareholders’ funds of the company have been managed by the persons appointed to do so for the shareholders
“The commission, therefore, as the apex regulator of the Nigerian capital market, has the responsibility to ensure that a thorough, independent and transparent process is put in place to unravel the true financial status of the company.
“Honourable Minister ma, may I restate that it is in the best interest of the Nigerian capital market and our recovering economy for the forensic audit of Oando Plc to be carried out, as reneging on same at this time would result in the following: Ridicule the regulators and project it to the global investment community as inefficient and lacking of integrity; completely erode investors’ confidence in the market; send the wrong signal to all market participants both locally and globally; discourage foreign investors from investing in our jurisdiction; and portray the absence of independence of the regulators.
“The commission in Section 13 (cc) of the Investments and Securities Act 2007 is mandated to advise the Honourable Minister of Finance on all matters relating to the securities industry.
“Thus, this advice proffered is as a result of our obligation to properly guide you on the best approach to take on capital market issues and it is strongly our recommendation that it should be adopted. “Honourable Minister, my request to seek for a written directive is not in any way meant to disrespect your person, but stems from the basis that every decision or direc tive of the board to the management of the commission is always documented to enable ease of implementing such directive.
“Given your current capacity as the board of the commission, it is only proper that you be guided on the necessary procedure to adopt.”
With the denials, claims and counterclaims, many stakeholders have called for dispassionate investigation of the circumstances surrounding the suspension of Gwarzo.
The House of Representatives, which directed the Minister of Finance to reinstate Gwarzo, has mandated its Committee on Capital Market and Institutions to carry out an independent investigation. A motion to that effect was unanimously adopted after it was put to a voice vote by the Speaker, Yakubu Dogara.
The decision of the House followed the adoption of a motion of urgent national importance by Diri Duoye (PDP, Bayelsa) who alleged that the conflict between the Minister of Finance and Gwarzo over the Oando forensic audit and corruption allegations were major factors in the events that led to the suspension.
According to him, there were allegations of interference by the Ministry of Finance in the discharge of the SEC’s responsibilities, with the Oando forensic audit matter being largely responsible for the DG’s suspension.
He noted that the intervention by the House would put the matter into proper perspective and contribute to amicable resolution of the conflict in order to protect the image of the SEC in the interest of both local and foreign investors.
In his contribution, Toby Okechukwu (PDP, Enugu) said a thorough investigation was necessary in order to forestall the ugly past experience that led to the stock market crisis in the past.
“Nigerians should know why the DG was sacked. A total panel of inquiry is needed in SEC,” Okechukwu said.
In his remarks, Sani Kaita (APC, Katsina) said the SEC was a very sensitive and important organisation to Nigeria and the international community and the House should be involved in the investigation of the issues.
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