SEC board approved N1.7bn severance package, says Gwarzo

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The supended director-general of the Securities and Exchange Commission (SEC), Mountie Gwarzo has given clarifications on why N1.7bn was paid as severance package under a “Golden Handshake” scheme to workers of the commission under his leadership.

Gwarzo was an executive commissioner at SEC when former President Goodluck Jonathan appointed him to lead the commission on May 22, 2015.

On assuming office as DG, he got a severance package of over N104 million as benefits of his former position, while some staff of the agency were also rewarded.

A panel set up by Kemi Adeosun, minister of finance, had indicted Gwarzo of paying himself and other staff of the commission severance pay worth N1.7 billion.

The panel headed by Mahmoud Isa-Dutse, permanent secretary of the finance ministry, had recommended his dismissal but Gwarzo has denied any wrongdoing, arguing that the board of the commission approved the pay.

He said he was involved in extra-budgetary spending.

A document seen by TheCable showed that the acting general secretary of the commission notified the head of human resources of the board’s approval of the “golden handshake” scheme, through an internal memo dated March 12, 2015.

“The board of Securities and Exchange Commission at its 79th meeting held on Thursday, March 12, 2015 considered the report of the board ethics, establishment and general purpose committee seeking the approval of the Voluntary Retirement (Golden Handshake) proposal,” the memo read.

“The rationale for this exercise is the fact that management found the workforce top heavy and one way to address the issue was to come up with incentives for early retirement for certain categories of staff of the commission.”

“The effect of the provisions of the ISA cited above is that the commission is empowered to cater for all of its financial obligations from its funds. However, such amounts must be expended from a budget, which must be approved by the board of the commission.”

The memo also directed that the project should be funded with allocations for some budget heads in the commission’s 2015 budget and ordered for “immediate implementation”.

“Section 4 (1) (d) of the Investment and Securities Act (ISA), 2007 (Appendix II) empowers the board of the commission to consider and approve the annual budget of the commission to consider and approve the annual budget of the commission as may be presented to it by the management. Thus the board in exercise of its power as contained in the ISA approved the 2015 budget of the commission,” the memo read.

“Furthermore, section 19 & 20 of the ISA (Appendix III) empowers the commission to establish and maintain a fund, the proceeds of which it may apply to meets its financial obligations.

“The effect of the provisions of the ISA cited above is that the commission is empower to cater for all of its financial obligations from its funds. However, such amounts must be expended from a budget, which must be approved by the board of the commission.”

The report of the panel was submitted to President Muhammadu Buhari last week.

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