SEC Gives Reason for Oteh’s Suspension

The board of the Securities and Exchange Commission (SEC) Tuesday provided clarification for its decision to send the Director General of the commission, Ms. Arunma Oteh, on compulsory leave, stating that it was necessary to enable the board to investigate allegations that she mismanaged funds for Project 50. 

Project 50 is a year-long programme organised by SEC to celebrate 50 years of capital market regulation in Nigeria. Reacting to her suspension, stockbrokers and other capital market operators welcomed the board’s decision, adding that they were not surprised given the weight of the allegations that emerged during the probe of the capital market by an ad hoc committee of the House of Representatives. Her removal, however, had no impact on equities trading at the stock exchange, as the NSE All-Share Index closed slightly higher by over a quarter per cent.

 Our correspondent had exclusively reported the board’s decision to send her on compulsory leave, a report that was later confirmed in a statement by the SEC Secretary, Mr. Edosa Aigbekaen. “The decision of the board (taken at its 66th meeting on Monday) was arrived at after consideration of the report of its Audit and Finance Committee which had been directed to investigate the sources and uses of funds for the Project 50 event. “Amongst its conclusions, the committee recommended an independent audit of Project 50 and that the key actors in the management of the funds should be asked to step aside to allow an unhindered investigation,” SEC said in the statement. 

The SEC board named the Executive Commissioner, Operations, Ms. Daisy Ekineh, as an interim replacement for Oteh. Apart from asking Oteh to step aside, the SEC board also considered issues regarding the council of the Nigerian Stock Exchange (NSE) and particularly the request by the interim president of the council, Mr. Bulama Manu, that having stabilised the exchange, they should be allowed to begin the process of disengagement. After due consideration, the board approved this request and directed that it should be effected in an orderly manner. The board also directed the council to take steps to ensure that all legal issues affecting its effective functioning are addressed, while it should work out the modalities for council members’ disengagement. 

Some stockbrokers, in welcoming the board’s action, said they had expected it a long time ago given what had transpired during the public hearing by the House of Representatives Ad hoc Committee investigating the near collapse of the capital market in April and last month. The President of the Chartered Institute of Stockbrokers (CIS), Mr. Mike Itegboje, said: “It was expected when you consider the events in the past several months. We just hope that the investigation (by SEC) will make things better and not worse. “The market is still bleeding and nothing has been done to stop it. Nothing has been done to remove non-members SEC injected into the NSE council illegally.” 

Another senior stockbroker, who spoke on the condition of anonymity, said that it was the normal thing to do by asking an incumbent chief executive to step aside if there are allegations that are being investigated. According to him, some of the allegations and counter-allegations were quite weighty and they should be investigated thoroughly. “If you look at the bribery allegations during the public hearing and the issue of funds mismanagement under Project 50, you will know that they are serious matters,” he said. During the public hearing, Oteh had told the committee that SEC did not receive donations from quoted companies for the funding of Project 50. At the end of trading at the stock market, the NSE All-Share Index rose by 0.27 per cent yesterday, lower than the increase of 1.3 per cent recorded the previous day. 

A broker said Oteh’s removal might not have a direct impact on trading at the stock market since she was not known to have had a particular policy direction for the market.

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