The Minister of Finance, Kemi Adeosun, has described as “misleading” and “mischievous” allegations that she ordered the recent suspension of the Director General, Securities and Exchange Commission, SEC, Mounir Gwarzo, following his refusal to carry out her directive to stop forensic audit of Oando PLC finances.
Mrs. Adeosun, who briefed journalists in her office in Abuja over the issue, alleged that Gwarzo attempted to blackmail her to stave off the sanction by threatening to leak a memo to the media.
The minister narrated how the suspended SEC DG allegedly breached official procedures and protocol for mails delivery in her office, by delivering a memo to her through the SEC staff seconded to her office.
“The copy of the memo was delivered in a sealed envelope with a message that any action against Mr. Gwarzo would result in same (the memo) being leaked to the press.
“It was this threat of blackmail that strengthened my resolve to suspend Mr. Gwarzo and allow the Administrative Panel of Inquiry, API, to proceed with its probe,” the Minister told the briefing.
The minister, who was accompanied by the Permanent Secretary, Federal Ministry of Finance, Mahmoud Isa-Dutse, said the probe of allegations of corruption against Gwarzo, and into Oando PLC finances are two separate investigations that government was awaiting their reports.
The Minister said her decision to address the media on the issue was to avoid a possible backlash and negative impact her continued silence could generate on Nigeria’s capital market in particular and the financial sector of the economy in general.
Apart from her responsibility to approve the composition and terms of reference for the API into allegations against Mr. Gwarzo, the minister said given the speculations and the potential damage on the capital market, it became necessary to set the records straight.
“The integrity of the capital market is vital to the growth of the Nigerian economy and must be managed in an orderly and transparent manner to ensure investors’ confidence. Its leadership must maintain and be seen to maintain the highest standards of integrity,” she noted.
Contrary to insinuations that Gwarzo’s sanctions had anything to do with Oando, Adeosun explained that the original decision to suspend the shares of the company and conduct a forensic audit was approved by SEC since October 20 and endorsed by the Federal Ministry of Finance.
Prior to that decision, she said the SEC management, led by Gwarzo, had presented adequate evidence that showed that Oando Plc had a case to answer, with regard to infractions of the Investments and Securities Act 1999, ISA.
Adeosun said following the query to Gwarzo on November 3, and his response on November 7, more investigations were carried out to cross check facts he gave, particularly on banks.
Besides, she said when Gwarzo was confronted with evidence that contradicted his responses in the query, it was evident that an API needed to be conducted to clarify all issues.
However, the minister pointed out that the delay in taking a decision to sanction Gwarzo was to allow the gathering of adequate evidence, in compliance with Public Service Rule, PSR, on the suspension of a very senior member of the financial regulatory community, “to avoid a possible impact on the market.”
Although she agreed meeting with Gwarzo on Monday, November 27, the minister said the issues discussed centred on his responses to the query, whose inadequacy made it become clear he would be suspended.
“Yes, there was a meeting on Monday, November 27, with him, along with the Permanent Secretary, Ministry of Finance. But, at that meeting, he was never directed to stop investigations into Oando, never.
“In fact, in October when the original suspension order on Oando took place, a group meeting was held with the leadership of SEC, not just with him, and they presented very clear evidence that Oando had a case to answer. We were satisfied with that. That remains our position,” she added.
When it was evident from that interaction that he was going to be suspended from office, the Minister said Gwarzo prepared a memo, dated November 28, on the subject of Oando PLC investigation, stating that copies of the memo, which did not bear official receipt stamp of the Minister’s office, was delivered by Gwarzo in a sealed envelope using some staff of SEC seconded to the Minister’s office, in breach of official mail delivery procedures.
The copy of the memo, the minister said, “was delivered with a message that any action against Mr. Gwarzo would result in same being leaked to the press.
“It was this threat of blackmail that strengthened the resolve of the Minister to suspend Mr. Gwarzo and allow the Administrative Panel of Inquiry to proceed with its probe,” the Minister said.
A copy of the memo, which Gwarzo reportedly circulated in the media, made reference to a verbal directive he claimed the Minister issued, directing him to discontinue the forensic audit on Oando PLC and allow a tripartite meeting with legal officers of SEC, Oando and Finance ministry to come up with a penalty.
“No contrary evidence has been presented to confirm what he said was true. Therefore, the investigative work on Oando and all other ongoing investigations being undertaken by SEC in the discharge of its statutory functions have continued.
“For the avoidance of doubt, there was no directive whatsoever to discontinue investigation into Oando and this was reiterated to the current SEC leadership at the formal handover meeting,” the Minister said.