Oteh/Hembegate Who’s Fooling Nigerians?

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  • The Facts, the Fictions

  • EFCC Barks, Will It Bite?

As EFCC moves in to investigate the bribery and fraud allegations against the embattled Chairman of House of Reps Committee on Capital Markets and the DG of Securities and Exchange Commission, palpable fear grips both parties

The gridlock between the House of Representatives’ Capital Market Committee Chairman, Mr. Herman Hembe, and Director General of the Securities and Exchange Commission (SEC), Aruma Oteh, has assumed a new dimension as the beleaguered Hembe has decided to stand down as the Chairman of the Capital Market Committee over accusations that he asked for N44 million bribe from the Securities and Exchange Commission. Hembe told journalists in Abuja that the other members are also resigning.   It will be recalled that Director General of the Commission had in a public hearing made serious allegations including that the Director-General, Securities and Exchange Commission, Ms. Arunma Oteh, allegedly spent N30m on hotel bills in eight months following her appointment in January 2010. According to the report, it was said that in one day alone according to documents exclusively obtained by DESERT HERALD magazine, Oteh spent N850, 000 on food, while on another day; she incurred additional N85, 000 expenses in the same hotel (Transcorp Hilton Hotel) for which SEC’s account was debited. Other claims also include that two Access Bank Plc employees were also said to have been hired as advisers to Oteh notwithstanding the fact that the Commission has among its employees competent staff to handle such job for her. The report as gathered by this magazine revealed that the two employees, Mr. Charles Ugheli and Mr. Titi Olubiyi, were reportedly engaged in 2010 in breach of due process and against the advice of both the Legal and Human Resource departments of SEC as the two officers were said to still retain their appointments with Access Bank but were being paid allowances equivalent to that of a director in the Federal Civil Service whenever they travelled out of Abuja. Meanwhile, correspondences made available to DESERT HERALD magazine indicate that SEC’s Director-General, Ms. Arunma Oteh, may have succeeded in ‘blackmailing’ the Chairman of the House Committee on Capital Market, Hon. Herman Hembe, with the allegation that the lawmaker demanded N44 million bribe from her. The documents  show that Oteh might have lied to save face as SEC internal memos and correspondence with the Hembe committee showed that it was actually SEC that initiated the move to bribe the committee with an offer to sponsor the public hearing with over N30 million. “We all know that the National Assembly has its budget. Provision for all oversight functions of Committees including public hearings are being provided by NASS. The SEC management under Oteh are fully aware that NASS is financially capable to sponsor such public hearings. The idea of initiating to support the hearings is obviously to bribe and compromise the outcome. If the SEC under Oteh believes that they are clean they will never offer such unsolicited financial support to the Committee. If the EFCC is serious they must investigate Oteh and other management of SEC because for me it is clearly a bribe for SEC to offer financial ‘support’ to an autonomous arm of government for a job the constitution has recognized and approved”, a staff of the SEC who doesn’t want to be mentioned lamented. However, one of the invoices showing the gluttony and consumption capacity of the embattled Director General of Securities and Exchange Commission (SEC), Ms Arunma Oteh, shows that a whopping sum of N91, 000 was expended on a meal at a sitting even when Nigerian workers agitating for a paltry N18, 000 minimum wage are dying in the process. “It is a classical depiction of the profligacy in the Nigerian Public service, which is obviously to the detriment of the downtrodden”, said another source in the National Assembly. Hembe had at the House plenary session offered to resign his chairmanship position while he attempted to prove his innocence over the allegation by Oteh and accused the SEC boss of actually offering to bribe the committee with an offer of N30 million. Hembe’s allegation on the floor of the House even though as usual the name bribe will not be indicated was however confirmed by documents obtained from reliable sources in SEC a copy of which was made available to DESERT HERALD magazine. The secret memo which showed how the SEC also initiated the move to sponsor the controversial public hearing with N30.4m budget has also been released in Abuja. Letters and memos between the House and SEC also gave a good insight into how the deal was struck. From the records, it will be difficult for both Hembe’s committee and Oteh’s SEC to exonerate themselves on the allegation of bribery and corruption because under normal circumstance there won’t be need for SEC to contemplate sponsoring the public hearing or for the Committee under Hembe to accept such ‘assistance’ in view of the nature of assignment involving SEC before them.    In the same vein, the Senate last week reacted to the SEC probe saga and reiterated that “it is wrong and abnormal for any committee in the National Assembly to seek for financial assistance from ministries, departments and agencies (MDAs) of government it intends to probe. Our rules are clear on public hearings. When a committee is informed of the necessity for public hearing, it will articulate its budget and submit same to the principal officers of either the Senate or the House of Representatives. “The principal officers normally approve the budget after which the clerk, who is the accounting officer, will then go and collect the budget for use. So it is not normal, and it is not our practice for a committee to go and seek financial assistance from any of the MDAs it intends to probe. We don’t seek for such assistance”, Senate spokesman, Enyinnaya Abaribe told journalists in Abuja last week. But in obvious contradiction which pundits believe it is wrong considering the fact that NASS has multi billion naira budgets every year and which also suggests was probably the reason why Hembe’s committee and other previous committees solicited for such assistance from MDAs, Abaribe said: “on the other hand, some committees, in terms of building capacity, may have assistance from these MDAs. You cannot supervise a technical area like the capital market without knowing what it is all about”. By Abaribe’s submission, he has indirectly justified such assistances from MDAs even though the NASS has sufficient resources and provision in its budget to finance such capacity building training/courses. By encouraging such assistance in the name of anything pundits lamented is by implication compromising the independence of NASS particularly during such public hearings. The nagging question is what is the NASS doing with its huge budget?  A memo dated March 9 signed by one Hassan Mamman, a Senior Supervisor in the Corporate Affairs Commission, was headlined thus: Re: PUBLIC HEARING ON THE NIGERIAN CAPITAL MARKET, a proof that there was something fishy somewhere.  A source close to the National Assembly told DESERRT HERALD magazine that it was Arunma Oteh that tried to entice Hembe with N30 million in the run up to the investigations of the “near-collapse” of the capital market by his committee, and as such members of the House Committee insist “she has some explanations to make”. According to our findings Oteh may have initiated the move to ‘blackmail’ the chairman and some members of the committee with allegations of bribery and of collecting escatodes for a Dominican trip, due to their itchy fingers as “they neither collected estacode for Dominican trip nor asked for N44m and will now conduct the hearing.” Our source went on: “She even sought the intervention of the Deputy Speaker’s wife but she declined, saying that she doesn’t want to get involved with her husband’s job. She has some explanations to make. She was asked not to allow Union Bank deal. She refused. She was warned against Intercontinental Bank deal with Access Bank, she ignored it”. In the series of internal memos originated from SEC and tendered by Hembe shows that on March 1, 2012 same Hassan Mamman of the Corporate Affairs department raised a memo in which he suggested that they support the House capital market committee’s public hearing. “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 weeks long event,” the memo said. And Oteh minuted thus: “Excellent idea,” which inside sources claim that Oteh’s minutes of “Excellent idea” was a show of relieved that an idea on how to compromise the committee even though in the letter it was the co-sponsoring that was finally found. The second memo dated March 9, also raised by Hassan Mamman, recommended that the commission donates N26.2 million for live TV coverage of the public hearing and N4.2 million as secretarial needs, making it N30.418 million. The third memo by E. K. Aighekaen dated March 13, conveyed extracts from minutes of 63rd meeting of the SEC board held on March 12, which approved a maximum of N30 million in support of the public hearing. The memos did not specifically say if the monies were provided to Hembe, or if he collected as it is hardly using the administrative language to clearly indicate so. “If you must know, there was an agreement for such money to be given to the committee. Unfortunately, when SEC submitted their memorandum for the hearing, they were shocked at the letters they got from the Committee requesting for some specific documents. “The DG put a call to the Chairman, Hembe on why they were asking for those documents and he told her that they were relevant to the hearings. The DG felt that she would no longer “finance” the public hearing as she felt that she believed she would be witch hunted”, said our source. It was leant that a committee member of Igbo extraction tried to intervene but Hembe’s mind was made. “Everything must be brought in the hearing. The woman is a blackmailer. She even sought the intervention of the Deputy Speaker’s wife and she declined, saying that she doesn’t want to get involved with her husband’s job”, Hembe was quoted to have said.  “I must tell you now that members who neither collected estacode for Dominican trip nor asked for N44m will now conduct the hearing. She has some explanations to make. She was asked not to allow Union Bank deal. She refused. She was warned against Intercontinental Bank deal with Access Bank, she ignored it. Let’s watch and see. NASS Members have reputation for corruption so anything thrown at them sticks. But executives are the ones killing Nigeria”, he concluded. One of the memos read thus: “Please, recall that the commission received a letter of invitation from the leadership of the House of Representatives Committee on Capital Market inviting the management of the commission to a public hearing on the Nigerian Capital Market slated for March 13 – 30, 2012”. The leadership of the Committee had also earlier advertised the hearing in some national dailies in which other stakeholders were also invited alongside the commission to the three-week long event. The department had suggested to the management the need to support this great effort of the National Assembly to finding a lasting solution to the challenges facing the Nigerian Capital Market. “We were then mandated to approach the committee with a view to finding out the areas where such support is required. The committee welcomed this development and accordingly forwarded a budget estimate for the public hearing. “In view of the above and in pursuit of the commission’s statutory responsibilities to the Nigeria Capital Market and in furtherance of our mutual relationship with the National Assembly as major stakeholders in the capital market, we hereby recommend the sponsorship of two items only from their budget as follows: these include live coverage, secretariat needs all totaling to N3o, 418,800. Investigation by this paper has shown that the SEC had responded to a February 28 invitation letter to its director-general by the committee. The letter signed by the Clerk of the Committee, Mr. Femi T. Ogunsanya, reads in part: “In accordance with Sections 62, 88 and 89 of the Constitution and Order XIV, No 8 and 9 of the House of Representatives Standing Orders (2011) the House Committee on Capital Market and other institutions have been mandated by the House of Representatives Resolution (HR.103/2011) of votes and Proceedings of Wednesday, 14th December, 2011 to conduct a three-week public hearing to identify the manifest causes of the market’s near collapse with a view to finding lasting solution. “By extension of the above, the committee therefore resolved to invite the public, and all stakeholders in the financial/stock market sector to the three-week public hearing commencing from Tuesday 13th to Friday 30th March, accordingly.  “On this note, I am directed to invite you to be part of the proceedings. You are also expected to submit 30 hard copies and two soft copies of memoranda to the Clerk/Committee Secretariat on or before 12th March, 2012 in Committee Room 19, 2nd Floor, White House, House of Representatives Wing, National Assembly Complex, Abuja. “You are also expected to attend and take this Public Hearing serious as a core regulator of the Market. “As we partner to bring lasting solution to the Capital Market’s near collapse, please accept the Committee’s best regards to your esteem office.” The Committee at the SEC’s instance, later sent a N35, 719,490 estimate needed for the hearing and how it would spend the money, to SEC. The breakdown is as follows: PUBLIC HEARING:  (1) Publicity—(a) Advert in Newspapers) Business News (N1,001,000); Daily Trust (N1,001,920); Punch (N998,800); Vanguard (N1,001,960); and Tribune (N1,601,560). Sub-total= N5, 605, 240. 1(b) Advert in television stations: Channels (N745, 250.00); AIT (N715, 200.00); and NTA (N785, 000). Sub-total= N2, 245, 450.  1(c) Live coverage: Channels (1hr)—N4, 550,000; AIT (2 hrs) –N12, 993,800; and NTA (3hrs)—N8, 660,000. Sub-total= N26, 203, 800. B. Secretariat Needs: (a) Official reporters (N500,000); (b) Technical crew (N300,000); (c) Postal Services (N350,000); (d) Stationery ( N250,000); (e) Cards N15,000; and (f) N250,000. Moreover this paper has gathered that as at press time, the EFCC and the House Committee on Ethics and Privileges might quiz the DG, all the three Commissioners in SEC, and the Chairman of the House Committee, Mr. Herman Hembe, any moment from now. However, SEC had issued a statement denying offering any bribe to Hembe, the statement, issued by a spokesman for Oteh, Mr. Obi Adindu, said “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 ad hoc 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 totalling 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 market 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.” Observers believe that preliminary evidence from the memo suggests there is no saint in SEC or in the committee.  A reliable source from the EFCC told DESERT HERALD magazine that the EFCC is presently conducting preliminary findings by looking at correspondences between the House Committee and the SEC. “Investigators have also been liaising with the hotel where Oteh allegedly incurred N30 million bill. The key players might be invited by Friday (23rd March, 2012) or early next week for interrogation. Already, some commissioners in SEC have expressed willingness to testify before the EFCC and the House Committee”, said our EFCC source. Although the shameful and revealing stories of corruption and in some cases outright thievery of the nation’s resources has been well documented in many public hearings conducted by both the Senate and the House of Representatives including the massive scam in the power sector, BPE and of recent that of the ministry of Petroleum with Mr. Jonathan’s government unable to act on the discoveries presented to it by the Committees which has continued to kill the nation’s economy and increase the growing poverty in Nigeria, Nigerians have expressed doubts about the commitment of the ‘new’ EFCC under Mr. Lamorde to demonstrate government’s seriousness in the fight against corruption. Whether Mr. Lamorde’s employer and boss, Mr. Jonathan will allow him to independently act and prove the Commission’s commitment to Nigerian’s in view of the embarrassing episode that is known as Oteh/Hembegate remain to be seen. With additional report by Maryam Musa

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