Capital Market Probe: House Hearing Exposes Infighting at SEC

The ongoing investigation into the near collapse of the Nigerian capital market by a House of Representatives ad hoc committee assumed a new dimension yesterday as the Director-General, Securities and Exchange Commission (SEC), Ms. Arunma Oteh, and members of her management committee openly disagreed on policies, programs and actions of the regulatory agency.

The session exposed an institution torn apart, with an atmosphere of deep-seated animosity and mutual distrust not only among the top echelon but within its rank and file. The committee had on Tuesday issued a summons on Oteh and the entire management team.

This was after the same committee had hinted that it had received a series of petitions suggesting the existence of serious wrangling and crisis within the regulatory institution.

In the opening shots at Wednesday's proceedings, Oteh apologized profusely over her absence on Tuesday and explained that she did not intend to undermine the parliament when she excused herself from the public hearing.

Chairman of the panel, Hon. Ibrahim El-Sudi, promptly accepted her apology and also clarified that their rather harsh reaction was not out of any personal grudge but an attempt to ensure mutual respect in the relationship between the executive and the legislature.

“We have no ill feelings at all or harbor any other motives other than to ensure that Nigerians respect our democratic institutions. All the arms of government complement each other and we must not undermine any of them,” El-Sudi said.

The panel then opened its file of petitions and confronted Oteh with the several allegations levelled against her by persons suspected to be insiders in the organization she superintends.

The petitioners accused her of high handedness and running a non-inclusive administrative system. She was also accused of embarking on massive recruitment drive and head-hunting of persons styled as young professionals while ignoring the pool of personnel she met on ground.

Oteh was also confronted with the allegation that she allowed two members of staff of Access Bank Plc to be seconded to SEC; a situation they claimed represented a conflict of interest.

Although Oteh tried to justify all the actions, her claim that these actions were the result of expert advice and collective decision of the management deflated her defense.

One after the other, members of the management, who ought to know the inner workings of SEC, disowned these decisions and actions, leaving their boss in the lurch.

Cashless Economy: CBN Deploys over 60, 000 PoS Terminals

The Central Bank of Nigeria (CBN) has said that it had deployed 60,003 Point of Sale (PoS) Terminals across the country as at April 29, 2012 as against 5,300,which was available as at June 2011.

The apex bank said it was determined to drive electronic payment systems in the country through its cash-lite economy initiative and as such it would continue to deploy more PoS across the country as part of its efforts at ensuring the success as well as the seamless operation of its cash-lite policy program.

Head, Shared Services Office, CBN, Mr. Chidi Umeano, who dropped the hint in Lagos at a cash-lite event put together by the Lagos Chapter of the Nigeria Computer Society (NCS), said 14 mobile payment operators licensed in August 2011, recorded 35,971 transactions valued at N227.92 million in January 2012.

This, he said, was expected to grow geometrically as awareness increases, maintaining that all stakeholders had been strengthened in ensuring the success of the program and that the CBN maintains an active engagement with all to ensure seamless transition to the much desired cash-lite society.

Chairman of the Lagos Chapter of NCS, Mr. Adeoye Rogba, who spoke on the security issues surrounding cash-lite initiative, called for a better security system that would guard against fraud that may arise through internal and external hacking.

Umeano stated that the CBN created the Nigerian Electronic Fraud Forum (NEFF) to carry out the following functions: educating and informing all banks and other stakeholders on various electronic fraud issues and trend, proactive sharing of fraud data/information amongst stakeholders to ensure prompt responses and limit fraud losses and formulating cohesive and effective fraud risk management strategies.

Oteh, SEC’s commissioners disagree over capital market recovery plan

COMMISSIONERS of the Securities and Exchange Commission (SEC) openly disagreed yesterday on issues relating to the commission’s plan for restoring the integrity of the capital market at the on-going probe into the near collapse of the Nigerian Capital Market by the House of Representatives.

Director General of SEC, Arunma Oteh had informed the committee about an existing working document in the form of a road map for the recovery of the market.

The issue threw up serious disagreement among the commissioners when the committee asked them to confirm the existence or otherwise of the document. They all claimed ignorance of the document.

The SEC’s commissioners said the document was neither discussed at the management meeting nor given to them individually for their input. The Commissioner in charge of Legal, Charles Udora, said: “I do not know anything about the document. Nobody sought my input or attention on the roadmap”.

The commissioners equally denied being involved in the organization and celebration of the Project 50, a Golden jubilee celebration to mark 50 years of the existence of SEC. One after another, they described as untrue the earlier claim by Oteh that the celebration which was chaired by her had the support and participation of the management and staff of the commission.

The panel had grilled Oteh over alleged donations by the Central Bank of Nigeria (CBN) and some private organizations for the celebration, a claim the SEC boss denied.

On the mistrust and infighting in the commission, the Commissioner in charge of Operations, Daisy Ekina, and Udora said that the workers were disenchanted with the events in the organization. Udora said loss of trust in the leadership of SEC has resulted in the staff exhibiting indifference on matters concerning the commission. He said: “Our staff is no longer killing themselves for the organization because they feel they are not recognized”.

However, he said that there was nothing wrong in engaging contract staff by the commission he claimed that the efforts are not being made by the current leadership  to properly guide the staff in manner that they  would be beneficial to the  organization.

They also denied knowledge of any management meeting of the commission held to ratify the appointment of some new members of staff recruited into the commission.

CBN develops strategy to aid financial inclusion

TO further bridge the unbanked gap in the country, the Central Bank of Nigeria (CBN) has concluded plans to develop a strategy that will aid financial inclusion in the country.

Besides, with the growing rate of consumers at the retail banking end, as well as products to cater for some of their needs, the apex bank is also developing a framework to effectively address consumer complaints and financial literacy.

According to the apex bank, the strategy is aimed at reducing the percentage of adult Nigerians excluded from financial services from 46.3 per cent as at 2010 to 20 percent by 2020, with a view to enabling them to have access to financial services, engage in economic activities and contribute to the development of Nigeria.

In a notice made available on its website, CBN noted that the exposure draft, which was prepared by  a  German-based  Consultancy  firm,  Messrs  Roland  Berger  in  collaboration with the Enhancing Financial Innovation and Access (EFIA), Lagos, Nigeria would aid the apex bank achieve its financial inclusion objective.

For her part, the Director, Banking Supervision, Mrs. Tokunbo Martins, explained that the apex bank was working to ensure that consumers were adequately protected in the course of transactions with their banks, especially as the gap between the banked and unbanked is being bridged.

She emphasized the apex bank was also ensuring that financial literacy for consumers was not ignored, while complaints were properly attended to.

Meanwhile, the International Finance Corporation (IFC), a member of the World Bank Group, and the MasterCard Foundation have launched a partnership to increase access to financial services for an estimated 5.3 million people in Sub-Saharan Africa.

According to the institutions, by building on recent economic momentum and stability in many African economies, the project will create new opportunities for economically disadvantaged people to expand businesses, gain access to cost-effective financial services, and manage risk.

The partnership, which currently stands at $37.4 million or N5.9 billion through the IFC and the MasterCard Foundation, will help microfinance banks expand more rapidly and develop new products and cost-effective delivery channels, while expanding coverage in new, often hard-to-reach locations. The project will also help providers to deliver low-cost mobile financial services to low-income customers.

Index Summary
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