Wednesday, March 21, 2012

SEC, Ms Arunma Oteh And Hon. Herman Hembe: Who initiated the “bribe”?


“The House committee sent a letter of invitation to SEC for the public hearing. The letter contained requirements listed by the committee needed to facilitate the hearing. Based on those requirements and as part of its responsibilities regarding the development of the capital market, the DG recommended that N30 million be approved. The approval was made and in line with public service payment process, the payment was to be made through electronic system.

But that same evening of the fateful Tuesday, Hembe sent a proxy asking for N5 million out of the approved N30 million. This aroused the Commission’s suspicion, which led to the Commission putting a hold on the entire payment process.” Hembe has denied asking for a bribe.

The embattled Chairman of the House Committee on Capital Market, Hon. Herman Hembe, Tuesday alleged that it was the Securities and Exchange Commission (SEC) that offered to bribe his committee with N30 million. The SEC Director-General, Ms Arunma Oteh, had alleged last week that she was being intimidated by Hembe because she refused to accede to requests for N39 million and N5 million “bribes” by the committee to “support” the public hearing into the crisis in the capital market. But Hembe, while offering to step down as chairman of the probe committee Tuesday, alleged that the true story was the other way round. The Press is in possession of copies of SEC’s internal memoranda which tend to suggest that it was the commission that initiated the move to “support” the House Committee with N30 million “for the success of the public hearing”.


But questions are also being asked as to how SEC arrived at figures for live coverage (N26,203,800) and secretariat needs (N4,215,000) in the internal memo, suggesting that the House committee might indeed have approached the commission for financial support based on its budget for the public hearing.Hembe’s offer to step aside was accepted while the entire members of the committee were eased out. Consequently, the House set up an eight-man ad hoc committee to begin the process of conducting the probe afresh. The new committee has 21 days to complete its assignment. The allegations levelled against Hembe and members of the House Committee on Capital Market have been referred to the House Committee on Ethics and Privileges. The allegations are to be investigated and a report of its findings is expected to be submitted in two weeks.
Hembe initiated the process of his withdrawal from the probe when, at the commencement of plenary, he raised a point of order and sought the leave of the House to offer personal explanations on the scandal rocking his committee.He explained that the allegations were false and claimed that he neither demanded nor took bribes but fought hard and rebuffed inappropriate overtures to influence the committee in the course of its assignment. He recalled the incident of last Thursday and said the confusion arose "when the Director General of the Securities and Exchange Commission (Ms Arunma Oteh) rather than answering questions on serious matters put to her chose to proceed on a voyage of false allegations and branded the entire committee a kangaroo court”.
"I stand before you this morning to reaffirm my innocence regarding the allegations made against me by the Director General of Securities and Exchange Commission. I want it to be on record that I demanded no bribes and took no bribes but rather I fought hard and rebuffed efforts to be inappropriately influenced," he said. In a bid to buttress his case, the lawmaker brandished what he called three internal memoranda of the SEC in which the management of the regulatory agency sought to assist the House Committee with some funds to enable it conduct the now botched public hearing. In one of the memoranda dated March 1, 2012, one Hassan Mamman, an official of SEC, wrote to the DG initiating the process of assisting the committee.
The letter read in part: "In view of the Commission's role as the apex regulator of the Nigerian Capital Market and in consideration of the existing cordial relationship cultivated over the years between it and the House of Representatives Committee on Capital Market, we find it appropriate for the management to assist the Committee by co-sponsoring this three-week long event.  If the above suggestion is acceptable to management, the committee may be approached on your directives, to find out the possible areas for the support."
A second memorandum dated March 9, 2012 which was also addressed to the  DG of SEC  showed that the agency narrowed down the support to two items namely, N24,203,800 for the  live coverage and N2,215,000 for sundry secretariat needs of the public hearing. However, a third memorandum conveying extracts of the minutes of the 63rd meeting of the Board of the SEC held on Monday, March 12, 2012 showed that "after due deliberations, the board approved a maximum of N30 million as donation by the Commission to the House Committee on Capital Market to enable it undertake the public hearing”. Hembe argued that he was stepping aside even though these memoranda were enough to prove that it was SEC that made overtures to bribe him and his committee and not the other way round.
"I am conversant with the principle of law that in the exercise of judicial and quasi-judicial functions it becomes inappropriate to continue to preside when allegations bordering on pecuniary interests are made against your person. I hereby wish to disqualify myself and request the House to withdraw the entire committee from further conducting the investigative hearing," he said. Hembe threatened that he might seek legal redress in a court of law not only to clear himself of the allegations but demand compensation for the damage the whole episode had done to his reputation. His motion was immediately followed by another motion sponsored by the Chief Whip of the House, Hon. Isiaka Bawa, seeking to reinforce the earlier motion to excuse the House Committee from the probe.
Ms Arunma Oteh,DG SEC
The motions were unanimously adopted by the members sitting at plenary. In his final ruling on the matter, Speaker of the House, Aminu Tambuwal, explained that what had happened in respect of the probe were part of the learning process and the strengthening of democracy in Nigeria. "This morning we have passed through yet another challenge which though not unusual in the democratic process has subjected this institution to further refining. These challenges are necessary for the strengthening of our democratic institutions. "Before I proceed further, let me thank the Chairman of the House Committee on Capital Market, Hon. Herman Hembe, and the entire members of the committee for their courage in voluntarily withdrawing from this investigative hearing.  It is not a popular propensity of public officers in our clime, but it is in line with our legislative agenda of transparency in the conduct of government business.
"The incidence of 15th March, 2012 which forms the basis of the deliberations just concluded arose from an investigative hearing which was being conducted pursuant to a resolution of this House. The Constitution of the Federal Republic of Nigeria 1999 (as amended) in Sections 88 and 89 places upon the legislature the duty and responsibility to conduct investigations into the activities of government for the purpose of exposing corruption, waste and inefficiency. This is no doubt a responsibility which is hazard prone. However, as I have stated elsewhere, these hazards notwithstanding, it is a duty from which we cannot and must not abdicate.
"Let me assure Nigerians once again that we are totally committed to the fight against corruption and shall deploy all energies available at our disposal to fight this war. The old saying that ‘when the going gets tough, the tough gets going’ will continue to be our guide.  I also wish to assure Nigerians that in fighting this war, we recognise that we must, like Caesar’s wife be above board and suspicion,” Tambuwal said. He said that all committees of the House have constitutional backing to perform their legislative duties, adding that the lawmakers were not elected for the fun of it.
"Those who elected us expect that we represent their yearnings and aspirations. Nigerians have chosen presidential democracy as a bulwark against dictatorship, against corruption and waste and above all against executive recklessness, this is the duty to which we have been called and we have sworn to promote, protect and preserve the will of the people enshrined in the Constitution," Tambuwal added. He announced that the new ad hoc committee would be headed by Hon. Ibrahim Tukur Elsudim. Other members include Hon. Ini Udoka, Hon. Yakubu Dogara, Hon. Bimbo Daramola, Hon. Toby Okechukwu, Hon. Buba Jibril and Hon. Rose Okoh.
According to Tambuwal, the newly constituted committee would commence the investigative hearing based on the earlier resolution of the House de novo for the benefit of Nigeria and Nigerians. In order to avoid role conflict and ensure fair hearing for all, Tambuwal said the Chairman of the Ethics Committee who happens to be a member of the Committee on Capital Market had been excused from the position for the purposes of the present investigation. Similarly, the Deputy Chairman of the Ethics Committee who is now a member of the ad hoc committee is also excused from the Ethics Committee for the purposes of the ethics investigation. Deputy Minority Leader, Hon. Samson Osagie, has been appointed as the Chairman of the Ethics and Privileges Committee for the purpose of the investigation only. Meanwhile, SEC, in a statement issued Tuesday night, strongly denied making any overtures to the Hembe committee.
The full text of the statement read: "The Securities and Exchange Commission welcomes the timely action of the House of Representatives under the leadership of Rt. Hon. Aminu Tambuwal in creating the Adhoc Committee to preside over the Public Hearing on the Nigerian Capital Market. "There is no doubt that the action of the House aligns with our position and the view widely held by most Nigerians that the Hearing had deviated from the course set for it by the House and degenerated instead to a hostile attack on the Securities and Exchange Commission, and its Director General, Ms. Arunma Oteh. "We note the allegation made by Hon. Hembe on the floor of the House and on live television that it was Ms. Oteh who made financial overtures to him. We wish to state unequivocally that at no time and in no place did the SEC, Ms. Oteh offer Hon. Hembe any financial inducement.
"Despite Hon. Hembe’s claims even as he said he had copies of internal memos which he purportedly obtained from the SEC, however Ms. Oteh did not issue or cause to be issued any correspondence to Hon. Hembe which offered him financial gratification. "We confirm that the SEC received a document in respect of the public hearing with a list of items with cost implications totaling N39,844,490.00. "The correspondences which the Director General sent to Hon. Hembe comprised a letter dated 5th March 2012 which expressed her support for the Public Hearing in line with the SEC’s role as the apex regulator of the Nigerian capital markets and a cover letter for SEC’s submissions to the Public Hearing dated 12th March 2012. She had hoped that the Hearing would offer a platform for an objective examination of the market with a view to identifying the factors militating against its full recovery. She had expected that the outcome of the Hearing would facilitate realization of the SEC’s vision of a world class capital market that constitutes the engine room for our country’s rapid socio economic growth and development.
"It is sad that a genuine act of support to the process of fair and transparent review of our capital market has been twisted into something reprehensible. We totally disagree with the claim that we tried to financially induce or influence Hon. Hembe or anyone else. It goes against everything that the Director General stands for and has been known for, internationally and locally, by those who have known her in her professional career of over 25 years. "We are grateful to the House of Representatives for this intervention which we believe will strengthen the Nigerian capital markets and enable it contribute to the realization of the economic aspirations of the Nigerian people."

By Onwuka Nzeshi and Goddy Egene
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