THE face-off between the Securities and Exchange Commission (SEC) and the National Assembly (NASS) took a new dimension barely two weeks ago when the lawmakers passed next year’s N4.9 trillion budget without any allocation to the Ms. Arunma Oteh-led SEC.
The NASS anchored their reasons for excluding SEC’s budget from the passed 2013 Appropriation Act squarely on the fact that it does not recognise Arunma Oteh as Director-General of the Commission, following Presidency’s refusal to honour its resolution to sack Oteh.
Oteh’s trouble started when, during the public hearing on the “near-collapse” of the capital market, she accused the then House of Representatives’ adhoc committee chairman, Mr. Herman Hembe of seeking pecuniary gains from the investigation process.
Series of events led to the suspension of the DG, after which the Presidency recalled her in defiance to a NASS’ position and subsequent “standing sack order,” as well as protests by workers of the Exchange.
The House had, in July, adopted the report of its ad-hoc committee on the “near-collapse” of the Capital Market chaired by Ibrahim Tukur El-Sudi (PDP, Taraba) calling for sack of the DG over what it referred to as gross misconduct.
Oteh, who was earlier sent on compulsory leave by the government, was recalled back to her post in the wake of the consideration of the capital market probe report in July.
On resumption from its two months annual recess, the House passed another resolution mandating the President to sack Oteh within 14 days, an “advise” the Presidency did not honour.
But concerns are rife that the decision to exclude SEC’s budget means that assent to the Bill may be far away, especially as President Jonathan could have more than enough grounds to delay its endorsement. It, therefore, goes without saying that the essence of a “ground-breaking” early passage of the 2013 Appropriation Act is defeated by this avoidable omission.
In his submission last week, Mazi Sam Ohuabunwa, a private sector analyst and Officer of the Federal Republic, (OFR), was full of praise for the NASS, at least, for breaking the jinx that had, over the years, subdued successive annual budgets into months of ego-tripping and less-than-constructive debate between the Presidency and the National Assembly.
Such dilly-dallies and muscle-flexing often meant that actual passage, Presidential Assent and the attendant implementation of the budget, at their best, often came in April of the fiscal year.
The former Neimeth Pharmaceuticals’ boss, who shared his “preliminary thoughts” with The Guardian, said the “drums must roll for the National Assembly” for passing the budget before the beginning of the financial year.
He said, “there was clear evidence that they (the NASS) meant to redeem their image; and this is good news. It is clear to me that the Leadership of the Assembly, especially went out flat to show great level of maturity and level headedness. I salute Senator David Mark. He impresses me with his effective but quiet leadership of the Senate, which he brings to bear on joint responsibilities of the National Assembly.”
And for the Presidency, Ohuabunwa said: “If we are seeking for a sign that the Transformation Agenda is taking roots, perhaps, this might be one tenuous indication. I wish, therefore, to congratulate the President and his executive team for doing their utmost to submit the Budget propositions to the National Assembly in October.”
He, however, noted that it was sad the lawmakers failed to make provisions for SEC, a decision he viewed as putting a very sensitive regulatory institution in jeopardy.
Worried about the fate of the staff and how the Commission would be able to offset its statutory commitments, if the impasse subsists, he asked pertinent questions: “Is it right to bring down a whole national institution because of one person? What will be the impact of a demobilised SEC on the comatose Nigerian stock market, which the nation is struggling to bring back to life?”
Some analysts, who favour the silent decision of the Presidency to back Oteh, argue that the Capital Market Committee of the House of Representatives actually went beyond its terms of reference by specifically investigating the activities of SEC.
Former president of the Institute of Directors (IoD) and CEO, Icon Stockbrokers Limited, Mr. Chike Nwanze, for instance, insists that the committee was merely mandated to conduct public hearing to determine the cause of the market crash and measures to avoid a reoccurrence but the first chairman of the committee, Mr. Hembe, enlarged the scope to include the activities of the Commission.
“The Nigerian Constitution, he said, is quite clear on the separation of powers of the three arms of government. The House of Reps does not have the interest of the nation or the market in mind. They are more concerned about themselves,” Nwanze said.
Yet, Sabastine Hon, a Senior Advocate of Nigeria (SAN), believe the NASS was right in disapproving SEC’s budget proposal in its entirety. He reportedly told a national newspaper on Thursday that the history of unresolved issues between Oteh and the NASS justified the action, which he described as constitutional.
Hon reportedly hinged his argument, supporting the lawmakers’ position, on “section 88(2)(a) of the Constitution, to the effect that “the investigative powers of the National Assembly are to enable that arm of government make laws with respect to any matter within its legislative competence and correct any defects in existing laws.
“A budget, by section 59 of the Constitution, can only become law if passed by the National Assembly. Nothing in section 59 or any other part of the Constitution compels the National Assembly to pass all budgetary proposals sent to it by the Executive.
“And since section 88(2)(a) has given the National Assembly investigative powers with a view to making laws over and concerning any matter within its legislative competence, such power of legislation should be interpreted to include the power to refuse to make any such law (in this case, to pass into law the budgetary proposals from SEC)…”
Already, reports are rife that, to avert a further deterioration of the matter into a major budget crisis, the Federal Government, could deploy Oteh to the Sovereign Wealth Fund (SWF).
Following NASS’ action, which appeared to have brought the issue to a head, the Presidency, through the Ministry of Finance, recently announced new appointments that signaled its readiness to “reform” the SEC.
It appointed Dr Suleyman Abdu Ndanusa as SEC chairman, as well as five other Commissioners.
A statement issued by Mr. Paul Nwabuikwu, the Special Adviser to the Coordinating Minister for the Economy and Minister of Finance, said President Jonathan approved the appointments in line with the provisions of section 5 of the Investment and Securities Act, 2007.
The five commissioners, who were drawn from different geo-political zones of the country, include Mallam Mounir Haliru Gwarzo (North West), as Executive Commissioner; Mrs. Sa’adatu Mohammed Bello (North Central), as Executive Commissioner; and Rt. Hon. Zakawanu Imhobobho Garuba (South South), as Executive Commissioner.
Others are Adefunke Abiodun, a lawyer (South West), as Non-Executive Commissioner; and Mr. Ugochukwu Ikemba (South East), as Non-Executive Commissioner.
Market Operators Want Judicial Resolution Of Conflict
By Godfrey Okpugie
AS the face-off between the Director-General of the Securities and Exchange Commission (SEC) and the National Assembly of Nigeria (NASS) persists, stakeholders have called on members of the Capital Market Committee (CMC) to urgently hold a meeting to seek a judicial resolution to the ugly development.
The protracted face-off, which began when the House Committee on the Capital Market decided to investigate the near collapse of the stock market, summoned Otteh, the Committee made a disclosure of Otteh‘s alleged reckless expenditure, and she in turn exposed alleged sharp practices carried out by the Committee. As a result, Herman Hembe, the then chairman, was sent packing as the EFCC commenced prosecution of his activities. The NASS recommended that Otteh be sacked, but the Presidency refused to do so.
To have its pound of flesh, as it now appears, the NASS has refused to process the budget of SEC for 2013, apparently because of Otteh. This has begun to take a toll on the activities of the entire commission.
On the implication of this development on SEC’s operations, the market and the entire economy, and whether, or not, the unresolved issue would weaken the confidence of investors and other players in the capital market, Lagos-based investment analyst, Mr. Gabriel Ogedegbe, observed: “When two elephants fight, the grass and trees suffer. But in this situation, the market may still continue to discountenance the cold war between Otteh and NASS because there are variables that could sustain the current market recovery.
“However, occasional shocks from the NASS may continue to send wrong signals to the international community as to the future stability of the market since the position of the chief Executive officer of the regulatory organ of the market is being called to question.
“Much as the call for her (Otteh’s) sack may not be 100 per cent convincing, nobody should be treated as a sacred cow at this stage when the world is beginning to appreciate the Nigeria’s stock market potential once again.
“In view of this, the Presidency should, as a matter of urgency, create an urgent platform, where the two sides could be on the same page.
Ogedegbe, however, frowned at the manner of Otteh’s recall from forced leave, describing it as a little bit funny, adding that the presidency should act fast to ensure sanity.
But Mr. Chike Nwanze, a one-time president of the Institute of Directors (IoD) and now the CEO, Icon Stockbrokers Limited, (member of the Nigerian Stock Exchange), was visibly unhappy about the development.
He objected seriously to the claim that the presidency erred when it recalled the SEC DG from forced leave.
He declared: “Let me correct your statement that ‘it (the face-off) began when the House decided to investigate the Commission.’
According to him, the assignment of the Capital Market Committee of the House of Representatives as announced was to conduct a public hearing to determine the cause of the Market crash, the steps taken so far to avoid such in future.
“However,” Nwanze continued, “the first chairman of the committee, Mr. Hembe, decided to extend the matter to include an investigation of the Commission for reason best known to him.
“The Nigerian constitution is quite clear on the separation of powers of the three arms of government. The House of Reps does not have the interest of the nation or the market in mind. They are more concerned about themselves. I think the various trade groups, who are members of the Capital Market Committee should urgently meet and possibly seek a judicial resolution of this action of the House of Representatives.”
Another operator, Mr. Jimi Itodo, a stockbroker, who said his views were personal and did not reflect the position of the stockbroking firm that employed him, said: “The position of the NASS is rather vindictive and parochial. They (the NASS) should not vent their anger on SEC because of Arunma. If they have grudges against the DG and the Presidency, they should seek redress in the court rather than refusing to approve the budget meant for the Commission. I wholeheartedly support the call for urgent meeting of the market stakeholders to find legal solution to the matter; otherwise, it would sooner or latter begin to have negative effects on the market.”
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