The Petition That Cost Arunma Oteh Her Job

The Securities and Commission is the Apex Regulator of the Nigeria
Capital Market. It has the vision of becoming the leading capital market
regulator in Africa. Its mission is to develop a capital market that is dynamic,
fair, transparent and equitable to contribute to the nation’s economic
Broadly, the commissions mandate is to regulate and develop the
Nigerian capital market in accordance with the provision of Investment and
Securities Act.

In carrying out these functions,
the commission is expected to enshrine, maintain and sustain investor confidence
in the market. All stakeholders rely on the commission’s ability to formulate
rules and regulations that will ensure fairness, accountability, transparency as
well as good corporate governance in the market. It is important to state that
the Securities and Exchange Commission is a vital
agent for the Federal Governments macro-economic management and therefore its
stability, consistency, functionality and astuteness in the performance of its
regulatory mandate should never be compromised.

development in the Nigeria Capital Market, which culminated in the removal of
the leadership of the Nigeria Stock
Exchange, requires an ardent and virile regulatory regime, for the
desired investor confidence to be sustained.

However, following the
appointment of Ms Arunma Oteh as the DG of the Commission, who formally was
working with the African Development Bank in Tunisia, and whose appointment was received with
cheers and enthusiasm by the Commission’s staff and other stakeholders in the
market, there were high expectations upon her resumption in January 2012, as she
promised to bring about positive changes and carry everybody along.

On the
contrary, recent developments in the Commission clearly indicate that Ms. Arunma
Oteh came with a different agenda, which from all indications is not in the best
interest of the Commission in particular and the capital market in
The following catalogue of the issues will corroborate the above


*Gross incompetence, lack of Organisation and un-necessary delays
in handling operations activities of the commission.

As you may be
aware, the operation arm of the Commission does the core regulatory activities
of the Commission that enable it to effectively carryout the regulation and
development of the Nigerian Capital Market. Therefore, the speed with which
operational issues are handled, determines how well the market operates. This is
because the capital market is a market driven by time factor and therefore, any
delay in delivery of issues will lead to multiplier effects on the investors,
Capital Market operators and indeed the economy.
Every securities issue
is time bound and any unnecessary delay in processing an issue may lead to a
failure of such issue. The investors who may have been contacted and indicated
their willingness to invest will change their positions if there is long delay. As there are competing
investment opportunities, and they may put their funds
somewhere outside the Capital Market.
Due to lack of cogent experience in
Capital Market operations, the Director-General of the Commission does not value
time as vital in granting approval for Capital issues and other operational
Before her assumption of duty, applications for Security issues
took an average of two days to be approved by the past Director Generals, today,
some applications take minimum of two Months. This unfortunate situation
constituted a great deal of pressure on the issuers and issuing houses, which
leads to information adjustment by the issuers and issuing houses.
It is
important to note that the Securities and Exchange
Commission is one Parastatal in Nigeria that has highly trained and experienced
Staff that are passionate in carrying out their duties. However, due to
incompetence, intransigence, procrastination, arrogance and stubbornness, the
Director General, has persistently refused to work in harmony with the Board,
the Executive Commissioners and the entire Members of staff of the Commission.
Rather, she depends largely on few inexperienced Staff she had illegally
employed. This has grounded the Commission’s operations.
Today, the morale of
the staff has gone down drastically at all levels of the Commission’s staff
cadres. She operates the Commission as if she is the sole administrator. Most
decisions were taken unilaterally and other members of the Executive were merely
informed. Due to the fact that she incessantly and frivolous travels, there are
many operations reports sent to her, which requires her urgent attention, but
remain unattended to.
Some of the operations reports has been in the Director
General’s office for over six months and above. This has affected the image of
the Commission, which is supposed to lead by example. As a matter of facts, the
Commission has a rule which gives time threshold for capital market to submit
their report and where they
delay, they are charged appropriate penalty, if the office of the Director
General of the Commission is committing same offence against the Operators and
other stakeholders in the Capital Market.
To this end, it will not amount to
an overstatement to say that since Ms. O. Oteh has been appointed as the
Director General of the Commission in the last two years, there is no tangible
or intangible value that she has added to the Commission to enhance its
operational performance. The market kept on failing in volume and value.
Notwithstanding, unprecedented number of Consultants appointed by the
Commission, no improvement has been recorded in any form, except that millions
of naira has been paid to the so called consultants.

*Investigation of failed Banks and the abrupt stoppage of APC

Commission in August 2008 was involved in the
investigation of the five failed
Banks i.e Afribank Plc, Intercontinental
Bank Plc, Finbank Plc, Oceanin
Bank Plc and Union Bank Plc.
The Commission carried out the investigation in
collaboration with the EFCC, CBN and SSS. 

The role of the Commission in that
national assignment was to find out the role of the Capital market operators in
the reckless lending by the Banks. The Commission
played a key in the investigation and alot of findings
were made. The essence was to determine how the recklessness of the
banks contributed in making shareholders lose their
investments and who the key
culprits were.

At the end of the investigation, a
comprehensive report was submitted to the then
Director General of the Commission (Malam Musa Alfiki) and he gave a directive
for an administrative proceedings
on the matter, to take a civil decisions on those capital markets operators
involved. While the APC processing was going on, Malam Musa Alfaki left the
service of the Commission and Ms. Oteh was appointed.
When Ms. O. Oteh
assumed duty, she was advised by one Mr. Simeon Obadiaro, who was appointed a
Director by her, to revisit the investigation and some
new set of staff were commissioned to carry out the same
investigation. The second
investigation did not bring out anything new, but the
administrative proceeding was abruptly brought to an
end on the day the decision was to be made on the matter.
The next thing that
was heard was the transfer of the cases to investment
and Securities Tribunal (IST). However, IST as an
appeal agency does not have primary jurisdiction on the matter. It is only when
a decision has been taken by the Commission and some parties are not satisfied,
they can then appeal to the IST for a second hearing.
The Commission does not on its own transfer a matter before it to the IST. It
therefore, came as a surprise when the Commission took such a decision.
the matter was sent to the IST, nothing on it.
Today, the shareholders of
these banks have lost their
investments, as the banks
have been taken over by NDIC and core investors were invited to buy into them.
This development has a negative effect on investors’ confidence, as people no
longer their investment in those
banks. What remains to be asked of the commission’s
Director General is; what informed her decision to stop the APC Proceeding and
send the matter to IST.
What explanation can she provide on the fate of those
investors who invested in those banks? Why would the Commission abdicate its
responsivity of protecting the investors in these banks for no fault of theirs?

*Approval of payments beyond he approval

The Director General does no take into consideration
the policy on approval limit and threshold issued by the Bureau of public
procurement and thus, approved various expedition beyond her approval limit of
For example, she approved N7,384,006.25 in December, 2011 for
media publicity support for the maiden Capital Market retreat in Uyo Akwa-Ibom
State. (See anex 3A & 3B). She also approved N10,179,00 paid to Message Wise
Limited without evidence of due process in awarding the contract for assisting
the Security and Exchange Commission on a 3-day issuer/investor outreach
programme in Port Harcourt, River State (see anex 4A & 4B).
The Director
General also approved for herself a two rent of N66million for her Official
residence at Maitaima District. The house for which the rent was approved was
not known to anybody in the Commission and thus there was no prior inspection of
the house before payment was made.
Subsequently, the Director General further
directed that additional payment of 66million be made to make it four years rent
for the unknown property. The attention of the Director General was drawn to the
Federal Government Monetization policy urging her to return the initial payment
of N66million to the Commission, but she did not take it kindly. This is a proof
that the Director General whimsically take decisions that exposes the Commission
to enormous financial implications without due process.

*Huge Hotel
Accommodation Expenditure

Prior to the illegal approval of the
N66million two years rent, the Director General spent a whooping sum of
N30million at the Transcop Hilton Hotel, during her unnecessary long stay in the
Hotel. There is no justification for such a use of Public funds when residential
accommodation abounds in Abuja.
If the N66million she approved for her
residential accommodation was not returned by the agent, the commission would
have been made would have been made to incur a whooping sum of N92million on the
accommodation of the Director General alone (see annex 5).

Travel Expenditure.

The Director General habitually incures travel
expenses for both personal and official trips on the account of the Commission.
She had from time to time requested the Commission to deposit N1million each to
two local airlines and with that pre-payment goes on frivolous trips without
internal processes being followed on the travel expenses.
In line with
internal Control Process in every government establishment, the travel by any
officer at any level start with the request, approval and clearance by internal
audit of the organisation to ensure that the trip is legitimate thereafter, it
is forwarded to the account department for payment.
Therefore, the
pre-payment made to Airlines is absolutely a violation of public service
process. It is important to state that some time in the Director General travel
abroad with NYSC members serving in her office. This is contrary to the policy
of the Commission, which permit only Assistant Managers and above to travel
abroad officially.

*Purchase of Director General’s Motor

The Director General approved and purchased 2-Nos Toyota
Land Cruisers at the cost of N37,555,555.56million and 1No Toyota Pick-up, Hilux
Double Cabin Pick-Up used as a pilot car at the cost of N5million. This is
despite the federal Government policy on Monetization of official Motor Vehicle
for Public Officers.
Even though Tenders Board meeting were scheduled, but
each time the Director General who is the Chairman was invited, she failed to
attend. However, on Saturday December 18, 2010 an email from Mr. Adeleke
Omotayo, a contract Director in the office of the director General, conveyed the
directive of the Director General to the head of Administration of the
Commission, asking him to buy 2Nos Black Toyota Land Cruiser Jeeps and 1No
Toyota Hilux Double Cabin Pick-Up for the director General by December 31, 2010.
(See annex 6A & 6B).
This expenditure was not approved by the Tenders
Board of the Commission. It is important to point out that as at the time the
Director General made the request for the 3-vehicles, the other members of the
Executive management, the newly appointed Directors for the Commission as well
as the existing Directors were equally supposed to be paid similar entitlements.
Surprisingly, she refused and insisted on for her own.
Indeed, of recent,
she made a request for two additional vehicles, but was turned by the Internal
Control Department for lack of cogent justification (see annex

*Irregularities In Staff Employment.

It is possible
knowledge that the Director General had recruited thirty-one (31) staff ranging
from Senior Supervisors to Directors without formal interviews and Board
approval as applicable.
Contrary to the commission’s staff manual provision
in chapter (2) page (5) item (2) and I quote “Recruitment of Senior Staff is the
responsibility of the Board and Junior Staff by the Executive management of the
Commission”. However, this policy was and is still being undermined by the
current Director General of the Commission.
All categories of senior staff
were illegally recruited unilaterally by the Director General, without recourse
to staff manual and the Board of the Commission. For instance, two full
substantive Directors, four Deputy Directors, and one Assistant Director, two
Assistant Managers, (19) Senior Supervisors that were engaged.
However, some
of the Senior Supervisors that were engaged on Contract were disengaged when
their contracts expired in December, 2011.
The positions of Assistant
Directors and above are by the policy of the commission and indeed that of the
Public service supposed to be filled by the Staff within the Commission, who
have been working for over a decade and enthusiastically looking forward being
promoted to those positions. It is only after promoting those deserving staff
and there existed additional vacancies, which will require giving opportunities
to outsiders that the need for it may be considered. In all cases, the Board of
the commission must review and approve such appointments before they are made
(see annex 7A & 7B).
In a similar manner, the Director General engaged
the services of Messrs KPMG professionals to recruit (10) additional Directors
vide an award Letter dated October 22, 2010 at the cost of Eleven Million
(11,000,000) naira only. The process was abruptly aborted by the Director
General after payment of more than half of the contract sum to KPMG and without
recourse to the Tenders Board that approved the earlier recruitment contract,
the Director General vide a memo dated January 17th, 2011 approved the
engagement of two consultants i.e Executive surf and Phillips Consulting to
conduct the same exercise, at a fee twice higher than the previous contract cost
without recourse to due process (see annex 8).

It is therefore, the
conclusion of the existing staff of the Commissioner that the Director General
has the intention of frustrating them and pushing them to the brink to either
resign or retire forcefully.
It is important to note that by the provision of
section 3 (2a) of ISA 2007, which clearly states that “In the case of the
Chairman or Director General, he/she should be a holder of a University Degree
or its equivalent with not less than 15yrs cognate experience in Capital Market
operations. By the provision of this section of ISA, the current Director
General of the Commission is not fit to occupy that position. Therefore, what is
going on in the Commission is a perpetuation of illegality in all its
ramifications. It has also been noted that the Director General of the
Commission issued a directive to the effect that only graduates from certain
universities particularly private universities should be accepted for NYSC in
the Commission. This is totally against the Federal Government

*Massive fraud in Financing of project 50 Celebration (50years
of Capital Market Regulation).

Under the guise of celebrating 50th
anniversary of the Nigerian Capital Market, the Director General Ms. Arunma Oteh
forcibly sought and obtained donations from banks and Capital Market Operators
amounting to N1billion, which was lodged in private accounts contrary to the
provisions of Part 1V, section 19(1C) of the Investment and Securities Act (ISA)
2007, which requires all monetary gifts, donations, contributions and other
funds received by the Commission to be paid to a fund or accounts established by
the Commission.
In addition to the donations received, about N200million was
spent on this one day event from SEC’s account without proper accounting and due
process. It is from this sum that over N42million was paid to Transcop Hilton
Hotel for accommodation and other services.
The details of how the N42million
was utilised had still not been made known to the Executive Commissioners and
the Board, neither had the funds been retired despite the instance of the
Commissioners and the Board that the funds be accounted for and duly retired. Is
is important to put on record that the N42million spent on Hotel Accommodation
and Services was queried by the Bureau of Public Procurement for not following
due process. (See annex 1A & 1B).
From the information gathered, Zenith
Bank donated the sum of N50million, Chapel Hill/Denham Stoke Brokers,
N100million, Access Bank N100million while First Bank paid for the Services of
QUOVADIS who was the Project-50 Consultant engage by the Commission, also
without due process of competitive bidding as required by the Public Procurement
Act. In addition, First Bank also gave an unspecific amount.
The Director
General also obtained donations of N25million to produce a Nollywood Movie
(Breeze) despite the advice of the Administrative Department that the cost was
on the high side. The amount so donated did not hit the Commission’s Account
neither did the award of the contract pass through due process as required by
law. (See annex 9).
There was a donation of N2.5million by Africa Financial
Corporation. Invoices for predetermined amounts were forwarded to the donors to
settle directly. (See annex 2). This is contrary to the provisions of Public
Procurement Acts, which requires that all procurement by Public Agencies/MDAS
must pass through due process of Advertising and selection of preferred bidder.
However, nobody can tell where the amounts so donated were donated, but it is
strongly believed that the monies were paid into private accounts of the
following who are cronies of the Director-general. Most of whom were illegally
employed staff in the Commission:
1. Orisabiyi Titilope- Senior Manager DG’s
office who is less that 6months in the service of the Commission and seconded
from Access Bank Plc. He is also made the chairman of Project 50 Committee,
which comprised of AD’s DD and Directors who are far his seniors, by
strangulated to serve under him, by the Director General.
2. Tunde Kamal–
Senior Manager- DG’s office.
3. Sanson Eyo–DG’s office
4. Franca
Chukwugor– Deputy Director-DG’s Office
5. Obi Adindu–Deputy Director- DG’s.
All approvals for the expenditures were unilaterally done by the
Director General without recourse to other members of Executive Management nor
the Board of the Commission.


The scenario
painted in this submission depicts the true situation of the Apex Regulatory
house of the Nigerian Capital Market. It is a picture that is daily becoming
gloomier. The leadership of the commission of the Commission is definitely not
leaving up to expectation, particularly at this time when the Market is at its
lowest ebb. As you know, only 2years ago, the Director General of the Nigerian
Stock Exchange was removed for reasons of Corporate Governance. Incidentally,
Ms. Arunma Oteh carried out that assignment. However, the current situation in
the Securities and Exchange Commission is that of a hunter that need to be
As the custodian of Corporate Governance code, her actions and
behaviour does not portray her as an exemplary Leader in the Nigerian Capital
Market. Based on the issues raised in the body of this petition, we fervently
appeal for immediate intervention in the following area:

1. That the
Director General of the Commission be prevailed upon to disengage all the 31
staff she unilaterally employed, without recourse to the Executive Management
Committee and the Board of the Commission.
2. That the Director General must
be prevailed upon to shelve her intention to employ 9 Directors. This is because
there exist suitably qualified and highly experienced personnel who can be
promoted to those positions. In a nut shell, there is no vacancy in the
Commission for these positions.
3. The Director General should be requested
to stop unnecessary trips that have not brought any applicable be benefit to the
Commission. She should be on her seat and understand the workings of the
Commission as the Apex Regulator of the Nigerian Capital Market. A lot of the
expenditures of the Commission did not follow due process. There were lots of
illegal approvals which were above the approving powers of the Director General,
but which she did with impunity.
This is the plight of the Staff in the
Securities and Exchange Commission, who are passionate and diligent in carrying
out their duties, but are held hostage by a gang of incompetent, inexperienced
and greedy fellows made up of Ms. Arunma Oteh, Mr. Obi Adindu, Mr. Adeleke B.
Omotayo, Miss Cynthia, Miss Franka Chukwugor, Mr. Tomi Oni and Charles Ughele
who are the only trusted staff that are running the Commission.
Apart from
these illegally engaged Staff, the Director General does not consider any other
staff, from the Executive Commissioners to the Securities Personnel fit to work
in the Commission.
The funny thing however is that since the coming of Ms.
Arunma Oteh, one cannot point out anything new she initiated at improving the
operational efficiency of the Commission, but she is busy telling anybody who
cares to listen that the staff of the commission are not competent. We are
therefore, asking for justice between the staff of the Commission and the
Director General Ms. Arunma Oteh.

Leading Questions:

When hotel bills for accommodation and services were paid for from the
Commission’s account, what other expenditures attracted such huge sums as to
require asking for donations of hundreds of millions from banks entities
regulated by the Commission?
2. The advantage of asking the donor to pay to a
third party is to avoid due process, raise fictitious invoices in which case no
goods or services were received. Did the invoices pass through competitive
3. The list of donors and invoices settled should be provided so
that the identity of the people behind these vendors can be traced at CAC.

4. What were the methods of selection of the vendors? Is it in line with
Public Procurement Act or someone just handpicked them?
5. Did the award of
contract for Nollywood Movie (Breeze) pass through due process before it was
funded by the donor? How was the preferred bidder chosen and who were the

On Failed Banks:

6. What informed the decision of
the Director Gener of the Commission to stop the Administration Proceeding
Committee Hearing from taking the final decision on the failed banks
7. What is the rationale for transferring the hearing to the
Investment and Security Tribunal (IST) knowing full well the agency has only an
appeal jurisdiction and not primary jurisdiction on such matters?
8. Why
would the Commission abdicate from its responsibility of protecting the
investors in these banks by abruptly stopping hearing?
9. With the takeover
of these banks by NDIC and the creation of bridge banks, which will eventually
be taken over by core investors, what happened to the investment of existing

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