August 20, 2010 3788 VIEWS


We are aware of a petition authored by one Kalu Ogba for and on behalf of a group referred to as the “Concerned Staff of SEC” . Though the author failed to establish his/her relationship to the staff cadre at SEC, the petition has gained traction because of recent developments in the market.


Having gone through the petition and without an opportunity to extract all the facts from both sides, the comments below represent a holistic look at the issues arising therefrom or related thereto.


The immediate observation discernible must be the need to question the authenticity of the source of the petition. We hold no brief for the SEC or/and the NSE in this matter but the facts as we see it compels us to state so. A cursory review of the comments, language and general quality of the petition is suspect. A career professional officer with an institution of the stature of the Securities & Exchange Commission (SEC) of Nigeria will not, and should not be seen to write with this kind of diction, presentation or language.


The more obvious and secondary observation must be that the issues raised are not entirely new or unexpected of what transpires during a change management phase. It is in the nature of Nigerians and public institutions (including private or SRO Institutions) that such petition writing activities has become a hallmark of our way of doing business in Nigeria. Only too recently, this was elevated to board levels and can be considered a part of an evolving value base we have copied from the political landscape.


The joke has often been made about those that are not sharing in the ‘national cake’ or ‘bounty’ becoming serial petition writers - those who shout the loudest. Truly, this will not be the first time such a petition will arise about the current DG of the SEC, as it has been with those before her or about operators in the market.


This petition was written on June 10, 2010 and we assume it is without prejudice to the current developments. The Proshare service, not being a conduit or platform for proxy wars and agendas, has taken the unusual step of commenting on this particular petition in order to highlight the pitfalls in running our market by way of petitions.


We are quite mindful that petitions, all through history, remains the only recourse for citizens and stakeholders who have increasingly found it difficult to get those entrusted with protecting their individual rights, freedom and liberties to be there for them. In its deepest meaning, it is the clearest indication of a breakdown in reasoned communication and a process for redress. Yet, at the other end of the spectrum, it is a potent weapon that can be used to destroy damage or denigrate an individual or institution.


So how does this particular petition play out, and why the traction?


It is worthwhile to represent that the actions of the SEC, or the perception of it, as an institution engaged in ‘choosing and picking’ which complaints/petitions to react to and when, raises the ante. From sacked directors to disillusioned operators, the petition season is now with us. In all of these, ordinary investors who traditionally have deployed this approach to seek redress for wrong doings in the market place have again become bystanders.


In the marketplace, the point is being made about the SEC’s selective application of its regulatory powers; rather than a focus on the unspoken truth about the breakdown of a process and practice within SEC that guarantees fairness and prompt resolution of concerns, complaints and cases bothering investors and the investment practice.


SEC’s ‘recent takeover of the NSE’ has therefore become a galvanizing issue for petitions to gain traction. This silly season approach may cloud informed judgement, and we believe that the market must and should not go down this path. It is a zero sum game.


There are, and still remains, issues bothering on unresolved SEC’s corporate governance status, the management of the post ‘takeover of the NSE’ engagement; the fundamental issues on practice and process in the market, the role of SEC/NSE in containing conduct of Directors of listed companies on the exchange, and the communications from the commission and allied media platforms that appear to sensationalize matters rather than focus the public on the larger issues relating to capital market reforms.


Having said that, we must now raise cogent issues arising from this petition:

  1. There are no concrete allegations against Ms. Oteh other than the notion that the petitioner believes she is incompetent and does not deserve the position she occupies. That is not an issue for staff members of the SEC to deliberate upon; it is the prerogative of the appointing jurisdiction to choose the Head of the SEC and she cannot be removed just because some members of staff do not like her style of leadership or approach to issues. This in itself is ludicrous and incomprehensible.
  2. It is said that she has been staying permanently at the Hilton Transcorp, Abuja. This can be investigated to verify and validate the facts related thereto. Is she entitled to an official accommodation and this has not been made available? Is it the practice for newly appointed persons in her circumstance (relocating to Nigeria from an overseas appointment) to spend some approved period of time in the Hotel before arranging her own accommodation and is there a time limit for such arrangement? Besides, is there any proof that she has abused the privilege in any way? Has the SEC provided her one which she turned down for non-genuine reasons? Is there a case of insensitivity to the financial status of the SEC in the management of her responsibility?
  3. She travels a lot? She spends so much on travels? This will have to be backed up with documentary evidence indicating wrong doing. What are the trips meant for? Are they authorized and official? Does it relate to the discharge of her functions which are not known to these members of staff? If yes and fully documented, with necessary supervisory approvals, then; there can be no wrong doing here.
  4. The allegations against the SEC Chairman can however be sustained. Even if no wrong doing can be established, or the impartiality and integrity of the chairman brought to question; the cost of maintaining the Chairman and members of the Board (especially the chairman who is expected to be a part-time position) could and should raise issues of propriety and abuse of fiduciary relationship and status. As a part-time chairman – is he entitled to be at executive related functions? Does he have an office designated as such in the SEC building – Chairman of the Board of the SEC? This will be against the intent of the current ISA Act 2007; unless of course, we have commenced the implementation of Recommendation 16 of the National Committee on the Capital Market Reforms which prescribes for an executive chairman for the SEC. Why are members of staff under the impression that their Chairman is or has an appearance or is able to wield the influence of an executive?
  5. The petitioner claims that the staffs at the SEC go to the office and do nothing. Is it that there are no departments, no schedule of duties? Could it be that there is a revolt or discontent within the management that might create tension, apathy to change or pure mischief that has led to such a conclusion? If these are true, then we encourage the recipients to take a look and publicly clarify this stance. Our take is that this cannot be substantiated and lacks merit purely on the face of it. It is however discouraging to note that members of staff of SEC can say this when millions of investors are still waiting for responses to the various complaints and infractions reported.
  6. It is also alleged that officials of the Ministry of Finance have been compromised. This has to be proven. There burden of proof is on the petitioner and this was not presented in the petition. We must therefore assume that this is a kite best left to be flown in the political field.
  7. Finally two things:
*      The onus is on the petitioner to back up every allegation with concrete proof. Merely expressing an opinion on the running of SEC is inadequate. The non-provision of a name, contact details and position within the organisation is enough to raise doubts about the sincerity and veracity of the claims made herein. Who would the respondents to the petition call in evidence?
*      The point about ghost authorship of the petition notwithstanding, the petition is worthy of a further investigation by those entrusted with supervising the SEC – if only to fulfill the ‘Who Guards the Guardian Principle’ - Quis custodiet ipsos custodes? This must take place bearing in mind that though the petitioner remains anonymous (ostensibly motivated by our lack of protection for ordinary citizens and employees acting as whistle blowers), and bearing in mind the current climate where such a petition was now made public at the height of a serious and sensitive ‘takeover’; the necessary agencies copied in the petition must look at this and put the matter to bed. We must however note that this must be done after it has been duly brought to the attention of the persons involved, and their own side of the story admitted, in line with the principle of fair hearing; one in which the SEC has been openly accused of not providing to the NSE DG/CEO it acted against; within the market expectation and perfectly within the purview of its powers.
Suffice to day, we can only move forward on the developments without repeating the errors of judgement, decision and actions that occurred in our recent past.
As regards the petition in question, the petition should be dismissed as the handiwork of disgruntled staff members or persons acting as proxies to the initiators, whoever they may be.


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