Kayode Otitoju: It’s time to recall Arunma Oteh as SEC DG

by Kayode Otitoju

The managerial problem of the Securities and Exchange Commission (SEC) since 2008 is easily traceable to the passage of the ISA 2007, which changed the composition of the board and specified the eligibility criteria for the appointment of the executive commissioners and the director general.

Prior the passage of the Investment and Securities Act 2007 on June 25, 2007, the composition of the board of SEC as contained in the repealed ISA Act 1999 was; a part-time chairman, a director general, two executive commissioners, six non-executive commissioners, that is, one representative each from the six geo-political zones, two ex-officio members one each from the Central Bank and Federal Ministry of Finance respectively.

Composition of the board of SEC as contained in ISA Act 2007 Section 3 sub-section (1) is as follows:

“There shall be for the commission a Board which shall consist of:

• A part-time chairman.

• The Director General and Chief Executive as Accounting Officer.

• Three full time commissioners.

• A representative of the Federal Ministry of Finance.

• A representative of the Central Bank of Nigeria, and

• Two part-time commissioners, one of whom shall be a legal practitioner qualified to practice in Nigeria with 10 years post-call experience.”

Section 3 sub-section 2 contained the qualification of the board members:

2a) “In the case of the Chairman or Director General of the Commission, he is a holder of a university degree or its equivalent with not less than 15 years cognate experience in the capital market operations.”

b) “In the case of any other member other than ex-officio member, he is a holder of university degree or its equivalent with not less than 12 years cognate experience in the capital market operations or legal practice as the case may be” and

c) “In the case of ex-officio member, he is not below the rank of a director in the Ministry or Central Bank of Nigeria as the case may be.”

Disqualification and cessation of appointment, that is, section 8 sub-section 1 and 2 with particular reference to (2) the power of the president, states “the president may at any time and upon the recommendation of the Minister, remove a person to whom subsection (1) of this section applies i.e. “provided no fulltime member of the board shall be removed without approval of the senate.”

Arunma Oteh, a first class degree holder of computer science, University of Nigeria, Nsukka and an MBA degree holder of Harvard Business School was employed straight from her 16 years with ADB where she was holding the position of Vice President in 2009. She became the DG of SEC in January 2010, with first-term tenure of office put at five years as confirmed by the Senate. At her resumption of office, much as she would have got her reformation agenda jump-started on time, the board and management on ground did not provide the necessary stimuli:

First, the chairman then was said to be scheming to transmute from part-time to an Executive Chairman as against the provision of the ISA 2007.

Second, the three full time commissioners who were upgraded from within SEC from the post of Executive Director to the post of Executive Commissioner saw themselves as heir apparent to replace Musa Al-Faki (DG), who had less than a year to the expiration of his first term. Consequently, when Oteh was brought from outside, she was branded a misfit for the job by the “resident” commissioners, and the chairman.

Invariably with the exception of the two ex-officio members of the board from CBN and Federal Ministry of Finance, other members of the board were put together by the former recommending  Minister – Shamsudeen  and were put together to work for/with Musa Al-Faki and definitely not with an Arunma Oteh from outside. Arunma Oteh having studied the situation started building a team that could assist her in her transformation agenda.

In my view, the accusation on secondment of officers from Access Bank to SEC, directing donation for ‘project 50’ to pay clients directly instead of first paying to the SEC’s account; non involvement of commissioners in ‘project 50’ decision making – all were products of the environment created by the Executive Commissioners and the Chairman.

To read in the newspaper that it was the same Commissioners and Chairman that gave Oteh a compulsory suspension leaves me with some reservations. The only provision in the ISA where the SEC’s board can ask a member to excuse the house is Section 11 under “Disclosure of Interest” whereby a member after disclosing his interest in contract/affairs does not sit to deliberate in such interest.

Now that the terms of office of the board, which suspended her has expired and the board dissolved, the environment is now conducive for Oteh to return to her job pending the re-composition of another board. She still has two and half years to complete her first term of five years and she can only be removed by Mr. President with approval by the Senate.

*This piece was first published in The Guardian

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