Head of the Securities and Exchange Commission in Nigeria, Ms. Arunma Oteh has denied, among other things, spending N850,000 on meals or purchasing cars worth N42 million.
In a bid to salvage its bruised reputation of the SEC, the Commission released a press statement on Monday in which it denied several allegations of unlawful practices leveled against it by the House of Representative Committee on the Capital Market.
The Committee led by Honourable Herman Hembe launched an investigation into the SEC on Tuesday 13 March which opened up the flood gates of accusations and counter accusations.
Shocking revelations followed each probe session, including allegations that the SEC boss had lived in the lap of luxury even as the nation’s Capital Market took a tailspin for the worse. Arunma Oteh, appointed to head the SEC in January 2010, was accused of splurging with a N850,000 feeding budget, as well as lodging at the Hilton Hotel in Abuja for an eight-month period following her appointment – instead of the 28 days permitted by law – which cost the SEC N30 million.
Her credibility and competence under attack at the probe sessions, Ms. Oteh went on the defensive. The embattled SEC boss in turn questioned the credibility of Hon. Hembe whom she claims had demanded N39 million from her ahead of the committee’s investigation and another N5 million a week before the probe.
With both parties squaring off for another round of public hearings on Tuesday, the Commission, in press statement signed by Mr. Obi Adindu and posted on their website, is responding to the shocking accusations made during the probe public hearings.
During the first of the public hearings, the Hon. Hembe led committee alleged that the SEC boss had consumed a whooping N850,000 in meals daily.
The press release addressed this allegation first, promptly denying it. “No, Ms. Oteh has never consumed a meal worth N850,000 no has she ever submitted such a bill to the SEC,” the release stated. It further clarified that it had reviewed the bill, which the SEC boss was said to have racked up during her 8 month-long stay at the Hilton Hotel following her her assumption of duty, and found that “the highest charge for food was N83,400”.
According to the statement, Ms. Oteh had charged that amount two months into her stay at the Hilton, on 24 March 2010, because of “an official dinner hosted by the SEC with a group of international capital market experts who were visiting Nigeria to provide technical assistance to SEC Nigeria”.
The SEC claimed the hotel’s billing records would prove as much, but still fails to clarify how the N30 million hotel bill was amassed or why the DG SEC had spent seven more months than was lawful at the expensive lodgings. The statement said Ms. Oteh had left the hotel on her own accord even before the Commission had provided her with suitable accommodations as she had been “unhappy with the lack of privacy at a hotel accommodation and for security reasons.”
It further denied renting property for Oteh, contrary to allegations made during the hearings. The SEC leader “lives in a rented accommodation procured in her personal capacity on her own account,” the statement claimed, adding that after several failed attempts to procure suitable accommodation for Ms. Oteh, “the Commission offered rental allowance to Ms. Oteh in lieu of official accommodation”.
The question remains, how much is being disbursed as “rental allowance”? Allegations made during the public hearing implied that the Commission spent as much as N62 million in rent for the SEC boss’ plush Maitama residence.
The committee asked the management of the commission to explain a memo that was issued by the Technical adviser to the DG, Franca Chukwuogu to the Head of Administration.
In the Memo (CADEO) dated 26/01/2011, Ms Chukwuogu had demanded through the head of Administration that the commission pay the rent for a five bedroom bungalow as the official rent for the DG. Another Memo from the Head of Administration, Bello Ibrahim showed that the rent for the five bedroom apartment at Maitama district of Abuja cost the commission over N62 million.
The Committee asked the management of the commission to explain why it paid the rent of the DG despite the enactment of the monetisation policy by the Federal government.
The House of Reps Committee further investigated claims that the Commission purchased four cars for the SEC boss at N42 million.
“She uses the two pool cars assigned to her, one in Lagos and one in Abuja,” the statement said. “The two pool cars were purchased to replace two old cars that were subject to frequent breakdowns. The purchase of these cars followed due process and the provisions of the public procurement laws.”
Finally, the SEC boss denied compromising “her regulatory function by engaging Access Bank staff on secondment”.
“Laid down rules, procedures and processes have been strictly complied with by the SEC since January 2010 (including in the processing of any transaction involving Access Bank). The seconded Access Bank staff were: a project adviser and a communication assistant, and these two areas are not at the core of the SEC’s regulatory function.”
The Commission, in the press release statement, conceded that many Nigerians suffered losses as the equity market fell from a capitalization of N12.6 trillion at its peak in March 2006 to N3.99 trillion at its lowest in February 2009. It further insisted that it had taken serious steps toward identifying the causes of the market downturn in Nigeria and putting a stop to further decline.
“Since Ms. Oteh assumed office as SEC DG,” the statement reads, “she has led a reform program to restore market integrity and revive investors’ confidence”. The reforms implemented by the SEC boss included “charging over 260 individuals and entities before the Investment and Securities for market abuses that led to the downturn, and seeking orders of disgorgement and restitution of investors”.
The SEC claims reforms set in place by Oteh have resulted in boosting the equity market capitalization which now stands at N6.6 trillion.
Ms. Oteh has faulted the public hearings, describing it as a “Kangaroo court”. During the last session, the SEC boss expressed her disgust at the line of questioning at the public hearings. “I believe that if we want to carry out an investigation in the interest of Nigeria and not in your own interest, I should not be subjected to what you subjected me to because the SEC did not give you N5 million in cash,” Ms. Oteh said addressing Hon. Hembe during the last public hearing, which she called unfair.
Hon. Hembe says all the counter-accusations and allegations of bias made against the Committee would be taken into consideration and invited the Economic and Financial Crimes Commission, present at the hearing, to fully investigate the Committee as well as himself.