The brawl between the Director-General of the Securities and Exchange Commission, SEC, Ms Arunma Oteh and the National Assembly assumed a new dimension three  weeks ago when the later announced zero budget for SEC in 2013, as well as directing that no revenue generated internally by the Commission should be expended for any reason. NKIRUKA NNOROM traces the genesis of the issue and concludes that they are just fanning their egos at the expense of the market.

WHEN the House Committee on Capital Market came up with the idea of conducting a hearing into the near collapse of the market eight months ago, hopes were high that at last a new course would be charted for the revival of the market that hitherto had been on its knees since 2008. Regrettably, that was not to be as what was supposed to be a life-saving mission turned out to be threatening the very existence of the market.

Instead of facing problems of the market headlong, the House Committee and SEC’s Director General engaged themselves in allegations and counter-allegations of bribery.  The outcome of that bribery allegation that ensued between the committee chairman, Herman Hembe and Oteh is what has degenerated to refusal of the National Assembly to approve SEC’s budget for the 2013 fiscal year.

Dangerous sign
The decision, three weeks ago, by joint House of Representative and Senate not to approve the budget submitted by the SEC for 2013, according to market operators, is a dangerous sign, not just for SEC as an institution, but also for the entire capital market. What every follower of events in the market has been asking since the public hearing turned to power-play between the National Assembly and the Presidency is why people who claim to be working in the interest and revival of the capital market should be pulling the system down with their utterances and actions.

Oteh’s many sins: Oteh could not be said to have been in the good books of the Legislators even before the drama involving her and Hembe during the capital market probe played out. Her trouble actually began with the manner she forced the erstwhile DG of the Nigerian Stock Exchange, NSE, Prof. Ndi Okereke-Onyiuke, out of office. It was believed that Oteh would have given Okereke-Onyiuke the option of proceeding on a terminal leave since her retirement was just a month away instead of forcefully ejecting her from office. Since Arunma took that decision, all has not been well with her.

Rep. Herman Hembe & Ms. Arunma Oteh

The voices condemning her action have not stopped since she arrived at SEC. Secondly, her choice of Mr. Emmanuel Ikhazoboh as the Interim Administrator of NSE pending the appointment of a substantive DG was widely condemned. The argument was that since Ikhazoboh was a member of Akintolla Williams Delloite that had audited the controversial account of NSE for which Okereke-Onyiuke was sacked, he had no moral justification to head the NSE.

To make the matter worse, the interim administrator over-stayed his tenure, even after a new CEO was appointed and thereafter, he was co-opted into the council of the NSE against criticism and opposition from stockbrokers. On dissolving the former council of the NSE, Oteh, it was believed, by-passed laid down procedure and appointed eight men into the council despite mounting opposition from stockbrokers.

The problem almost scuttled the NSE’s 2010 annual general meeting, but for the intervention of some senior stockbrokers. Those appointees were not removed until recently when the association of stockbrokers threatened to resist her.

There was also the issue of incompetence and high-handedness raised against her very early in her administration. This became glaring at the public hearing when high ranking officers of the Commission unravelled her alleged short-comings. Among the accusations raised against her were the appointments made into the Commission without following due process.

She was also said not be carrying her senior staff along in the day-to-day management of the Commission among other sins. Then, there was the project 50 over which she was accused of misappropriating some funds. Though the investigative panel constituted by the president to look into the allegations absolved her of misappropriating funds, it indicted her for lapses in human and material management of the Commission.

The last straw that broke the camel’s back: Afraid that probe at the public hearing was turning against her, the embattled SEC director general decided to open a can of worm by accusing Hembe of demanding N44 million bribe from her ‘as part of SEC’s contribution to the hearing.’ Aside this, Oteh also accused him of collecting an undisclosed sum for first class ticket to the Dominican Republic, but neither embarked on the trip nor returned the money.

Senate President, David Mark and Speaker of House of Reps, Aminu Tanbuwal

Hembe on his part claimed that Oteh had offered him N30million bribe and later stepped down as chairman of the Committee. Since this happened, the Legislators have increased their push for her removal. This is aside threatening not to have anything to do with SEC as long as she remains the DG.

Stakeholders’ take: For stakeholders in the market, the problem has degenerated to power play and ego saving mission rather than upholding the integrity of the capital market. According to Alhaji Rasheed Yussuff, Managing Director/CEO, Trust Yield Securities, the squabble between Oteh and National Assembly has taken a dimension beyond what is seen on the surface to a contention of who has the power to do what.

“Oteh, being an employee of the Executive is enjoying the protection of the Presidency. So, I think the problem is that of who has the power to hire and sack.  The legislature has done what it needed to do which is to recommend to the Executive to sack Arunma, but if the Executive in its wisdom decided that they should not sack her, I think that is where the issue should have ended. Now, the Legislature is saying, ‘you are going to sack her’, and the Executive is saying, ‘we are not going to sack her.’ So, it is a play of power between the Executive and the Legislature,” Yussuf said.

He insisted that it was necessary for the Executive and the Legislature to sit down and look at the bigger picture and effect of their action on the economy, saying, “I learnt that the Executive and Legislature have been talking, but to the extent that the legislature can come up with this, it means that it is either they have not been talking or they have not been agreeing. The ball is in the Executive’s court to ensure that they meet with the Legislature for quick resolution of this.”

He, however, warned against the danger of acceding to the Legislature’s demand, saying that all officers of government might be at their mercy if they succeed in getting Oteh sacked. Yussuf lamented that each time the capital market starts showing signs of recovery, one Executive or Legislative decision would crop up and distort the achievement.

He said: “We were all getting happy that the market is getting out of the doldrums. Since the resolution of the margin loan, the market was responding and was almost becoming one of the best in Africa. We had thought that with the development, we need to consolidate that recovery. Now, we are beginning to have Legislative or Executive pronouncement that creates the impression that all is not well, we may be unwittingly stalling the market recovery. That is not good for the market and the economy.”

Lending his voice, Mr. Johnson Chukwu, the Managing Director/CEO, Cowry Asset Management Limited, said: “It is a no contest for the Presidency and the National Assembly to continue to drag over this issue. They should quickly resolve it and allow the market to go on.

“Having said that, I want to say that the Legislature was wrong in the sense that what they did was a mob action which may have been the reason the President has dogged in and refused to consider their recommendation. If they had come up with well articulated reasons on why they think Oteh is not competent, I think it would have been easier for the President to look at the objectivity of their recommendations and accede to it.

“With the approach they adopted, it looked as if they had already made up their mind even before the House Committee’s investigation. So, it looks as if they started with an end in mind that adjudged her guilty or incompetent. That may be the reason the President has refused to sack her.”

A stockbroker who does not want his name in print said it was improper for the Legislature to attempt to cripple the capital market due to the action of one person. His words: “You gave an order that the woman should be removed, but because of power tussle, she is still left in office. What the Legislature should have done is to insist that the President should remove her before the budget is passed instead of singling out SEC’s budget.”

Conclusion: While, the National Assembly could not be said to be pushing for Oteh’s removal in the interest of the market, Oteh’s stance could be said to be typical of Nigeria’s ruling class’ attitude of ruling by force. For the members of the National Assembly, removing Oteh is as important as stamping their authority over her. What the warring parties have failed to realise is that the market they both claim to be fighting for deteriorates each time their disagreement deepens. At the end, it is the capital market that bears the brunt of their war to keep their pride intact.