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Arunma Oteh Calls House of Rep Committee’s Allegations “Frivolous” – Full Press Statement Inside

By on March 20, 2012

Arunma Oteh and the Securities and Exchange Commission (SEC) have released a press statement in order to clear the air concerning the allegations of incompetence and graft levelled against her by the House Committee on Capital Markets.

Below is the full text:


  • On Tuesday, 13th March 2012, the House of Representatives Committee on Capital Markets and other Institutions commenced a public hearing “to identify the manifest causes of the markets’ near collapse with a view to finding lasting solutions.”
  • In our belief that such a step aligned with the expectations of most Nigerians, many of whom suffered losses as the equity market plummeted from a capitalization of N12.6 trillion at its peak in March 2008 to N3.99 trillion at its lowest in February 2009, we prepared and presented a submission on the first day of the hearing. (Read here).
  • We outlined the causes of the market downturn in Nigeria, what steps we have since taken to salvage the market from further decline and what further steps we plan to take to fully restore investor confidence.
  • Since Ms. Oteh assumed office as SEC DG on 7th January, 2010 she has led a reform programme to restore market integrity and revive investors’ confidence.
  • These reforms included charging over 260 individuals and entities before the Investment and Securities for market abuses that led to the downturn, and seeking orders of disgorgement and restitution of investors.
  • Based on evidence of financial mismanagement and corporate governance lapses, the SEC in 2010 also replaced the leadership of the Nigerian Stock Exchange (NSE).
  • As a result, equity market capitalization now stands at N6.6 trillion.
  • There are also new products, new listing requirements, greater capacity among operators and regulators and a drastic reduction in market infraction among others.
  • Aware of the sensitivity of the capital market to information, we have generally exercised restraint despite the use of some media publications by some vested interests to tarnish the reputation of the DG and the SEC
  • These facts are provided to avoid creating room for persons pursuing personal vendetta to damage the reputation of our Director General, to diminish the authority of the apex regulator to fight market infraction and to undermine the integrity of our market.
  • The DG SEC recognizes the need to follow due process, probity and fairness, given her vigorous war against white-collar crime and other capital market improprieties.
  • The SEC therefore welcomes investigations by relevant authorities into its operations, actions and processes, as well as requests for information by members of the public.


  • At the public hearing, several frivolous and false allegations were made against the SEC and the person of Ms Oteh, Director General of the SEC. This release presents the facts as follows:

a.    Did Ms Oteh consume a meal of N850,000 or did the SEC pay a meal bill of N850,000 for the DG SEC?  
b.    Did SEC DG stay at a hotel prior to getting her rented accommodation 
c.    Did the SEC procure official accommodation for Ms Oteh? 
d.    Did the SEC purchase four cars for the DG SEC, Ms Oteh?
e.    Did SEC or the DG SEC compromise her regulatory function by engaging Access Bank staff?


  • Did Ms Oteh consume a meal of N850,000 or did the SEC pay a bill of N850,000 for the DG SEC? 

Answer: No, Ms Oteh has never consumed a meal worth N850,000 nor has she ever submitted such a bill to the SEC.

  • The bill referred to at the public hearing related to Ms Oteh’s hotel expenses during her stay at the Hilton following her assumption of duty.
  • We have reviewed her hotel expenses during her stay, and the highest charge for food was N83,400 on March 24, 2010.
  • This bill was in respect of an official dinner hosted by the SEC with a group of   international capital market experts who were visiting Nigeria to provide technical assistance to SEC Nigeria.
  • The bill for the official dinner was charged to her room, and therefore the SEC’s account.
  • This was a single incident, and was not a personal affair. Hilton’s billing records can corroborate this.


  • Did SEC DG stay at a hotel prior to getting her rented accommodation?

Answer: Yes, and this was in line with the terms and conditions of her employment verbally communicated to her on January 7, 2010 and confirmed in writing on January 11, 2010.

  • At the time of Ms Oteh’s assumption of duty as SEC DG, she had no home in Abuja.
  • The official policy of the SEC is to provide official accommodation for the DG. Pending the provision of such residential facility, the DG is lodged in a hotel.
  • Ms Oteh however voluntarily left the hotel before an official residence could be provided, unhappy with the lack of privacy at a hotel accommodation and for security reasons.


  • Did the SEC procure official accommodation for Ms Oteh?

Answer: No, she lives in a rented accommodation procured in her personal capacity, on her account.

  • In accordance with its policy of providing official residential accommodation for its DG, the SEC began on January 7, 2010 to search for official residence for Ms Oteh.
  • This policy on official accommodation was communicated to Ms Oteh in writing upon assumption of duty.
  • The transaction referred to at the public hearing was in February 2011, in respect of rental property in Maitama, Abuja at N25 million per annum, actually lower than the going rate of similar property in the area. The transaction collapsed when the property owner required the SEC to pay as much as four years rent in advance.
  • The issue of high rents has been a source of concern and been the subject of a bill debated on the floor of the House of Representatives. (Read here)
  • All the negotiations for an official accommodation failed for reasons relating to high cost, availability, and frequently changing terms.
  • These transactions never materialized; the SEC NEVER leased any property for Ms Oteh.
  • The SEC was not successful in finding accommodation for the DG. In line with its policy, the Commission offered rental allowance to Ms Oteh in lieu of official accommodation.


  • Did the SEC purchase four cars for the DG, Ms Oteh at N42 million

Answer: No. She uses the two pool cars assigned to her, one in Lagos and one in Abuja.

  • Pool cars are official cars that belong to the Commission and used for the purposes of the Commission
  • Since the DG’s arrival, only two pool cars have been purchased by the SEC and assigned to the DG
  • The two pool cars were purchased to replace two old cars that were subject to frequent breakdowns.
  • The purchase of these cars followed due process and the provisions of the public procurement laws.


  • Did the SEC or DG SEC compromise her regulatory function by engaging Access Bank staff on secondment?

Answer: No. Laid down rules, procedures and processes have been strictly complied with by the SEC since January 2010 (including in the processing of any transaction involving Access Bank). The seconded Access Bank staff were: a project adviser and a communications assistant, and these two areas are not at the core of the SEC’s regulatory function.

  • Prior to Ms Oteh’s assumption of duty, two independent studies commissioned by the SEC’s Board indicated that there were human capacity gaps at the Commission.
  • One of the initiatives she took to quickly address the capacity issues was to reach out to development agencies, sister regulators and the private sector for assistance.
  • This way, the SEC received technical assistance from a multilateral development bank, a sister regulator and the private sector to revamp its sub-optimal ICT infrastructure, to complement the in-house ICT staff.
  • Equally, the IFC/ESMID provided a Resident Bond Adviser, for 18 months, to help develop the fixed income market.
  • In addition, the SEC requested and received pro bono secondment of two employees of Access Bank, one a project adviser (on facilities management), the other on brand communication support (communication assistant).
  • These Access Bank employees have no connection with the core regulatory functions of the Commission in any manner as would create a conflict of interest.
  • In fact, Access Bank has disclosed the details of the secondment in its 2010 annual report.
  • The fact that the SEC has bank accounts and investments with a number of banks has not undermined our capacity to regulate or approve transactions relating to them.
  • The Access Bank secondment in 2010 happened because recruiting full-time staff at the SEC, as in many government agencies, takes a long time. For instance, the SEC’s recent recruitment of 52 Young Professionals lasted one full year.
  • Note also that Access Bank is primarily regulated by the CBN.
  • The transaction involving Access Bank that has required the SEC’s approval was that bank’s recent acquisition of Intercontinental Bank.
  • Most significant securities transactions involving a bank, such as a merger or acquisition, involve shareholders, the Central Bank, the Ministry of Finance, various departments at the SEC and the Federal High Court.
  • For a merger, an acquisition or takeover, there are laid down procedures for the SEC’s approval.
  • The DG’s office receives all applications to the SEC, and in the case of a merger or acquisition, forwards it to the Executive Commissioner Operations (ECOP). The ECOP in turn forwards the application to the Director of the Securities and Investments Services (SIS) Division who then forwards the application to the Head, Mergers & Takeover department, the Head, Legal Division of SIS.  The Director of SIS receives the analysis of the transaction from M&T and the legal opinion of the Legal Division, both of SIS. The Director SIS then makes a recommendation to the Executive Commissioner, Operations who in turn reviews and either endorses or disapproves the transaction and submits to the DG for final approval. The DG’s decision is based on the recommendations made and is communicated to the parties through the ECOP and Director SIS.
  • The Access Bank transaction was recommended for approval by all the departments and officers of the SEC who reviewed it.
  • The other stakeholders including the shareholders, the CBN, the Ministry of Finance and the Federal High Court also approved and endorsed the transaction.
  • On a review of the SEC’s records, we find that secondment is not a new practice and the public sector.
  • Indeed as far back as 1988, the DG SEC as a member of the Technical Committee on Privatization endorsed the involvement and appointment of private sector officials in the privatization process.


Obi Adindu

Securities and Exchange Commission

[email protected]


One Comment

  1. Aretha dadzie

    March 21, 2012 at 2:47 am

    SEC Nigeria Vs Honourable Hembe

    The so called SEC probe has sure
    generated a lot of heat with accusations trailing back and forth as to who did
    what. My concern however is the impact this will actually have on the capital
    market. I am also curious as to why there would be a proposed inquiry into the
    cause of the crash of the stock market. I thought that was common -knowledge,
    or is the Nigerian capital market suddenly isolated from the global community.

    The Nigerian capital market has
    actually fared better than most stock markets. Prices are generally low and
    while other developed nations are taking steps to identify the root cause and
    prevent similar occurrences in the future by putting in place proper corporate
    governance measures, Nigeria is tearing down its own capital market with its
    own hands.  Nigeria’s SEC had done good
    to put in place a code of corporate governance like other developed nations. Why
    an inquiry into the near collapse a market in 2009 is being conducted in 2012
    eludes me.

    Without taking sides, could this
    inquiry not have been done more discreetly given the sensitivity of the stock
    market? What happens where owing to the public banter that has been going on,
    investors panic and dump shares amounting to a further collapse, would another
    inquiry then be set up to look into what was man-made?

    Forgive me but the Honourable
    Hembe could have at least educated himself a little about the operations of the
    capital market before questioning a Harvard graduate. What exactly does he
    understand by investor protection? Does he require the SEC to set up police
    check points around each and every investor? Or perhaps there should be a
    review of the Investments and Securities Act to reflect this perception by the Honourable

    I’m not a fan of Nigerian probes
    because usually the prosecutor is often a persecutor who would dare not cast the
    first stone should it be a criteria that it be cast by he who has no sin. I remember
    the analysis by Professor Itse Sagay’s undenied assertion that the members of
    the House of Representatives earn N203.8Million, A member of the House of
    Representatives also earns N347, 945 per day. Are they therefore truly
    concerned, assuming without conceding that Ms. Oteh spent N850,000 on food, or
    are they merely offended that she (a woman, I hate to sound feminist) spends as
    much as they do?

     In a childish retort, Hon. Hembe now claims he
    was offered a bribe by the SEC. I need to be educated but which would be of
    more concern to the a legislator of the Federal Republic of Nigeria and which
    should he tackle heads on first, a bribery offer by a director general in 2012
    or a meal of N850,000 some years back. I’m curious as to how it escaped his
    memory that he was bribed until the allegation was made against him and why it
    took well over 5 days for that to come to public light.

    I may be no lawyer but I know
    that the Director-General is innocent until proven guilty and so is Honourable
    Hembe. However, it would seem that some degree of expert evidence is required
    for the alleged Memo of the SEC which purportedly incriminates the DG. Can someone
    please explain to me why a Memo that was issue on the 9th of March
    2012 suddenly seems like a document out of a 1990 file? Why exactly are the
    words unclear? I’m also unable to see exactly where it incriminates the DG.
    Yes, I am alleging a forgery or fabrication!

    My concern is the impact of all
    this ignorance on the stock market. This is a national disgrace. Again our
    lawmakers have thrown all sense of patriotism to the wind and proceeded heads
    on to tear down the capital market with their hands. How do we expect to
    attract Foreign Direct Investments this way? How do we expect to retain
    Investor confidence in the market? Assuming without conceding that the DG is
    guilty or the House had proven allegations against her, why was she not invited
    by the EFCC as against the House of Representatives.

    As for the SEC, I think it is
    disastrous (assuming without conceding that the memos are real) for such
    confidential documents to get to public light. Serious House-keeping Issues
    need to be put underway. There are moles in the SEC which need to be flushed
    out. Nigeria will only move forward when we learn to set aside our personal
    vendetta in the interest of national development and security.

    The House of Representatives wants
    to know why the market nearly collapsed. I’ll tell them, it was never standing
    on its own; it was leaning on the Nigerian Banking Sector, grown with margin
    loans. The recession came and its creditors called in their funds leaving it
    naked. If our leaders read they would have this answer and would spare the nation
    this show of shame and the waste of funds gone into setting up the so called