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He’s not the first SEC DG to be suspended — Adeosun explains Gwarzo controversy


Kemi Adeosun, Minister of Finance, says the suspension of Mounir Gwarzo, former Director-General of the Securities and Exchange Commission (SEC), has nothing to do with the ongoing forensic probe of Oando Plc as alleged.

Speaking while appearing before a House of Representatives’ investigative panel set up to examine the circumstances of Gwarzo’s removal, Adeosun said Gwarzo was not the first SEC DG to be suspended, adding that the action was to restore the confidence of investors in the Nigerian stock market.

Gwarzo had alleged that his suspension was due to his refusal to yield to Adeosun’s directives that he should drop the forensic audit of Oando plc, but Adeosun said this is not the case.

“Oando is a completely separate situation to (the suspension of) Mounir Gwarzo. Totally and completely separate,” Adeosun said.

“The allegation that I gave an instruction that the forensic audit should stop is laughable and I’m sure you saw the SEC team laughing because they know that that work is ongoing [on that] even as we speak. So it is not true. It is mischievous to even suggest that that was the case.”

Adeosun maintained that Gwarzo was suspended because there were evidences to prove that he serially violated public service rules.

For instance, she said Gwarzo is a director and a shareholder in two private companies, contrary to the rules of public service prohibiting such.

“On the 27th of October, 2017, we received a bundle of documents delivered to our whistle-blowing unit, making allegations, not only against Mr Gwarzo, but also against two other officers of the SEC,” Adeosun narrated to the legislators.

“On that basis I asked the head of the whistle-blower unit to investigate. We did not immediately suspended Mr Gwarzo because every allegation must  be subject to some scrutiny.

“Due to the seniority of Mr Gwarzo and the potential impact of the matter, I asked them to go straight to level two (of investigation), which is: ‘you either prove the case or we throw this out’.

“They came back with evidence that suggested that there was a very real need to issue a query to Mr Gwarzo, which is the procedure. Mr Gwarzo was then queried, he responded.

“Unfortunately, his responses contradicted the evidence that we had at hand. For example, Mr Gwarzo claimed that he had resigned from the company, but the evidence we had from CAC (Corporate Affairs Commission) showed him to still be a director and shareholder.

“So, on that basis, we felt there was a need to do more work. I sent the team back again, and this explains the delay between his response and his eventual suspension. He attested that he had resigned in 2012, meanwhile CAC was still showing him to be both a director and shareholder, so we needed to get other evidence.

“So we then went to bank records and we found that Mr Mounir remained a signatory to that account. And we obtained evidence of banking transactions where he signed as a director. That, then, for me, became conclusive evidence that the position he had maintained in his memo was incorrect, or at least, unreliable.

“And on that basis, we had an internal meeting where we looked at all the evidence. At the same time, we were receiving information from the staff of SEC that documents were being removed, and we knew that we needed to do a thorough investigation, of course that investigation could not be done with Mr Mounir still at the helm of affairs in SEC, and that was when we took the decision to suspend Mr Mounir.”

Adeosun said that after the suspension, she set up an administrative panel of inquiry to further look into Gwarzo’s case, and that the panel had submitted a detailed report that she would transmit to the President for further action.

“Mr Mounir is not removed, he has been suspended, and he is not the first DG of SEC to be suspended. In the absence of a board, the minister does have powers to suspend,” she said.

Also, there had been allegations that Gwarzo, who was a commissioner in SEC before his appointment as DG, paid himself a severance package of N104 million before assuming his new appointment even when the commission’s Director of legal advised him against it.

“On the issue of the severance pay that he collected, we have investigated it. He made some positions that a similar thing was done in the Central Bank; we have gone to Central Bank, that was not the case,” Adeosun said.

“As far as we are concerned, the over-ruling of the recommendation of the Director, Legal, was improper. And if there was any contention, it should have been referred to the ministry to adjudicate. You cannot judge in your own case and then pay yourself. It’s never done. And there is no history of somebody collecting N104 million one day, and resuming on another desk, in the same organisation the next day.”

However, Gwarzo insisted that the Minister has no power to suspend him. He also stated that it was not his job to ensure that the CAC updates its database to reflect the fact that he had resigned as a director of the said companies as far back as 2012.

On the issue of his severance package, he maintained that he was statutorily entitled to it, having spent the required number of years as a permanent commissioner in SEC.

Gwarzo said that according to the regulation, any permanent commissioner who spends up to two years in office is entitled to a severance package. He noted that he was appointed Permanent Commissioner in January 2013, and spent over two years before his appointment as DG in May 2015, hence the legality of the severance package.

The hearing was adjourned to a later date for continuation.

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