The Director-General of the Securities and Exchange Commission, Ms. Arunmah Oteh, returned to her post last Monday, after the two-month suspension from duties because of the fraud-related allegations and counter allegations between her and members of the House of Representatives Committee on the Capital Market. However, some critics insist that Ms. Oteh’s reprieve was ill-considered and premature. Such critics are not convinced by auditors’ report that her infractions were merely ‘administrative lapses’ as claimed.
Social critics may need to comment on whether the interests of stakeholders and the public in general would be better served with Oteh’s return; however, President Goodluck Jonathan’s declared zero tolerance for corruption appears out of sync with the elegant lady’s admission of a N5m ‘donation’ (some may call it bribe) to Herman Hembe, the agency’s oversight House committee chairman. It is unlikely that Oteh can provide any legal or constitutional basis for sponsorship of an ‘invigilating’ House committee member for any purpose whatsoever.
The prompt arraignment of Hembe by the Economic and Financial Crimes Commission on allegations of ‘extortion/bribery’ contrasts sharply with Oteh’s soft-landing, which was based on the report of an administrative panel. It also curiously contrasts remarkably with Mr. President’s apparent refusal to respect the recommendation of the National Judicial Council to reinstate Justice Ayo Salami as the President of the Court of Appeal.
There are lessons, nonetheless, to be learnt from the fallout from Oteh’s courageous outburst and allegations of demand for bribe by Hembe.
In the first place, the proceedings of the committee’s investigation confirm public suspicion that the oversight functions and investigative hearings of various parliamentary committees are simply avenues to line the pockets of members of the respective committees. Indeed, prior to the current revelation, both the Central Bank of Nigeria and the Ministry of Education had admitted ‘donating’ N50m to their respective oversight House committees during former President Olusegun Obasanjo’s tenure!
In spite of the illegality of such ‘administrative lapses’, global best practices in public accountability would suggest that it is inappropriate and indeed, unethical, for a supervisory body to be funded directly or indirectly by its subordinate agencies.
The revelations from the hearing of the House committees on the Capital Market and the fuel subsidy management scam are clear indications that such antisocial collusion may have become an entrenched culture. The question is how can this incestuous relationship be stopped?
In reality credible budget implementation has been deficient in probably all government Ministries, Departments and Agencies over the years. In spite of severe social and infrastructural deprivations, huge sectoral votes remain unspent annually, yet there has never been any transparent indication that unspent allocations were ever returned to the treasury for reabsorption in the following year’s budget composition. Not surprisingly, billions of naira budgetary allocations to MDAs have never translated into improved social welfare or meaningful infrastructural enhancement; inexplicably, the respective external auditors of these MDAs rarely report these significant unsubstantiated leakages, while the relevant oversight legislative committees do not seem to care, or ‘give a damn’, as the President would say.
The drama of Oteh’s suspension and subsequent reinstatement underscores an incoherent policy protocol for such matters in the Commission. It is recalled that while the SEC Board of Directors considered the so-called ‘administrative lapses’ weighty enough to warrant Oteh’s suspension, curiously, it was the Presidency in apparent cahoot with the Minister of Finance, Mrs. Ngozi Okonjo-Iweala, and the Head of Service who reinstated the DG! In fact, it required the personal intervention and pleas of Okonjo-Iweala for the SEC staff to ‘forgive and forget’, and once again embrace Oteh’s suzerainty.
However, some Nigerians insist that it will be nigh impossible for Oteh and the same team of directors, who daggers drawn, unanimously publicly condemned the DG’s alleged highhandedness and autocratic management style, to sheathe their swords and now work together peacefully. In other words, government’s reinstatement of Oteh may be at the expense of the harmonious management of the Commission and ultimately on investor confidence, the integrity of the capital market and the growth of the economy in general.
So, the question is, is the preservation of Oteh as the DG more important to government than the smooth cohesive administration of the SEC with a fresh candidate, who is unencumbered by the alleged abrasive tendencies and profligate disposition of the embattled amazon with public funds?
Government’s clean bill of health to Oteh also raises the question as to where one draws the line between the so-called ‘administrative lapses’ and culpable infractions that attract more severe sanctions. Oteh’s undenied singular management of stakeholders’ donations to the SEC’s ‘Project 50’ and her unilateral authorisation of travelling allowances/‘bribe’ to Hembe, for example, should count as serious infractions; the DG’s inclusion of staff from a commercial bank in directorate roles outside the enabling Act of the SEC is also a serious infraction. The DG’s unapologetic appetite for exotic and expensive management style may also be inappropriate for a public servant with millions of Nigerians barely surviving on $2/day.
The layman recognises that it is fraud to spend someone else’s money without appropriate authority, and the newspapers are replete with reports of conviction and sentence for small time misappropriation of third party’s frauds. In Oteh’s case, the actual value of the ‘Project 50’ for which the DG allegedly had sole discretion is reported to be between N100m and N1bn!
Incidentally, in her testimony, the erstwhile Director-General of the Nigeria Stock Exchange, Dr. Ndi Okereke-Onyiuke, revealed that the Exchange has consistently donated 0.3 per cent of the value of all its transactions to its supervisory agency, to facilitate the work of the SEC! Once again, how can the invigilator receive funding support from the supervised? However, Okereke-Onyiuke maintains that there has never been any reference to such fund inflow or its disbursement in the audited accounts of the SEC! The NSE should be compelled to confirm the value of these donations over the years, and the EFCC should unravel the utilisation of these funds, while such donations should stop forthwith.
From the foregoing, government’s decision to reinstate Oteh rather than replace her may regrettably be seen as a power show as the apparent body language suggests that government does not ‘give a damn’ about best practices, since it insists on imposing an evidently poor manager of persons, who has apparently lost the confidence of her team on such a critical regulatory agency.
Worse still, the legislators may ultimately also see Oteh’s return as unnecessarily provocative and a potential source of attrition and government’s gamble on her reinstatement may further assault the integrity of the capital market and ultimately restrain economic growth.
•Henry Boyo, an economist, wrote in from Abel Sell Nig Ltd, Lagos, via [email protected]
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