Adeosun, Gwarzo and Oando
Yet another national scandal, this time involving the capital market and its regulator, the Securities and Exchange Commission [SEC], broke out about ten days ago when Finance Minister Mrs Kemi Adeosun suspended Mounir Gwarzo, director general of SEC and ordered an administrative inquiry into allegations of financial and other impropriety levelled against him.
Soon afterwards, and other news media reported quoting sources close to Gwarzo that the suspension had other undertones. According to the account, Minister of Finance Adeosun unearthed a previous petition against Mounir Gwarzo and suspended him as Director General of SEC because he demanded to be served in writing with her order to stop SEC’s forensic audit of Oando Plc. The report said Mrs. Adeosun gave the order in her capacity as the Board of SEC and also implied that it was President Muhammadu Buhari who wanted the Oando inquiry stopped because she said the president did not give her orders in writing. According to the story, when Gwarzo insisted on a written order, the Finance Minister said he too had a petition written against him and that she would suspend him in order to allow for a full investigation.
The charge attracted instant public curiosity because a week before Gwarzo’s suspension, SEC ordered a forensic audit into Oando Plc. Five firms including Akintola Williams Deloitte, United Securities, Nasiru Muhammad and Co, SPA Ajibade and TJADAF Consulting and Associates are to undertake a forensic audit into the oil firm’s affairs. The audit is to among others determine Oando’s financial health, determine if there was insider trading in the company’s stock in 2013-15, determine the accuracy of its shareholding records and review its assets disposals and the purchasing parties.
The audit was ignited by petitions to SEC from Ansbury Investments and Alhaji Dahiru Barau Mangal both of whom alleged that Oando was a going concern, insider dealings, acquisitions of subsidiaries without SEC approval, declaration of dividends from unrealised profits, misstatements in the company’s audited financial statements, violation of SEC rules on remittance of dividends to registrars, related party transactions and discrepancies in Oando’s shareholding structure, among others. SEC then began an investigation and ordered Nigeria Stock Exchange to suspend trading in Oando’s shares. Oando went to court on October 24 to try to stop both the forensic audit and suspension of trading in its shares but a Lagos Federal High Court judge threw out the case on November 23. SEC then proceeded and ordered a forensic audit.
If indeed an initial probe by SEC established that there are grounds to proceed with a forensic audit of Oando, then that is a very serious matter indeed. The capital market regular owes it a duty to the law, fair play, investors, the capital market, the economy and all Nigerians to proceed with this audit unhindered and establish the truth, if any, of all the charges. It is for this reason that we, like all Nigerians, were shocked to hear that there was an attempt to interfere with the forensic audit of Oando and force SEC to stop it.
However, the Finance Minister has strongly denied the allegations made against her. She told reporters last Friday that “no amount of blackmail by the suspended Director-General of the Securities and Exchange Commission, Mr Mounir Gwarzo, would make her to stop the Administrative Panel of Inquiry’s probe of the embattled SEC DG.” Mrs Adeosun said it was not true that she attempted to stop the forensic audit of Oando and she accused Gwarzo of peddling falsehood against her.
Happily, SEC announced last week that the forensic probe of Oando is continuing unhindered. That is as it should be. However, the barrage of charges and counter-charges between Gwarzo and Adeosun must also be disentangled so that Nigerians learn the truth. We believe that this should be done by the National Assembly’s capital market committees at an open and transparent public hearing where all parties should testify publicly.
Daily Trust