Administrative Panel recommends Gwarzo’s dismissal from Public Service

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Mounir Gwarzo
Mounir Gwarzo

Minister lacks power to suspend me—Gwarzo.

The Administrative Panel of Inquiry has recommended the dismissal of the suspended Director-General of the Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, from the Public Service of the Federal Government.

The panel’s recmmndation comes as the embattled Gwarzo told participants at a public hearing by the House of Representatives that the minister lacks the power to suspend him from office. He cited sections 5 & 8 (1 & 2) of the ISA 2007.

He said, “Accordingly, there was no basis for the suspension meted out to me by Mrs Kemi Adeosun. Very respectfully, I plead that I should be reinstated and the Minister should tender an apology to me for the damage she has caused me.”

Gwarzo at the Public Hearing in Abuja on Tuesday said, “The Honourable Minister lacks the power to suspend me from service. The appointment into office or removal from office of the Director General of SEC is a power strictly resident with the President of the Federal Republic of Nigeria. This is evident from the provisions of Sections 5 & 8 (1 & 2) of the ISA 2007. The Minsters role is only limited to making recommendations to the President.

 The Panel’s report sighted by InsideBusiness also recommended that the suspended SEC director-general be referred to the Independent Corrupt Practices Commission for further investigation of the allegation of using his position to influence the award of contracts to Outbound Investments Limited.

The report and recommendations of the API headed by the Permanent Secretary of the Federal Ministry of Finance, Mahmoud Isa-Dutse which has been submitted to the Minister of Finance, Kemi Adeosun, also directed Gwarzo to refund the sum of N104,851,154.94 being the severance package he approved and received.

It noted that the holding of the position of the director-general of SEC as well as a director in two private companies (Medusa Investment Limited and Outbound Investments Limited) was in breach of public service rule 030424, public service rule 030402 and Section 6 of the Investment and Securities Act, ISA 2007.

Other recommendations by the Panel as stated in the report include –

  • Mr. Mounir Gwarzo should be referred to the ICPC for further investigation of the allegation of using his position as Director-General to influence the award of contracts to Outbound Investments Limited in view of the provisions of Sections 57 (12) (b) and 58 (5) of the Public Procurement Act, 2007
  • Gwarzo should be dismissed from the Public Service of the Federal Government, in line with PSR 030402 (in relation to the allegation on Golden Handshake), having breached paragraphs 313 and 316(4) of the Financial Regulations (Government Notice No. 219 of 27thOctober, 2009)(engaging in extra budgetary expenditure without appropriate approval);
  • Should be discharged on the allegations of award of contracts to Medusa Investments Limited; award of contracts to other companies as mentioned in paragraph 5.1.1 and to which no relationship with Mr. Mounir H. Gwarzo was sufficiently established.

The Panel, however, recommended that the cases of two management officers of the Commission – Mrs. Anastasia Omozele Braimoh and Mr. Abdulsalam Naif H. be referred to SEC for appropriate disciplinary action in line with the provisions of the Staff Manual of SEC.

The Panel advised the Federal Government to re-orientate public servants to the very fact that the Public Service Rules and Financial Regulations are ground norms of every Government Service Contract, be it at the Federal, State or Local Government levels.

It added, “Accordingly, all Government Extra-Ministerial Departments and Agencies should be made to understand that the PSR and FR are superior to whatever specific legislations and domestic arrangements that guide their operations, except when such issues were not covered by any provision of the PSRC.

Build up to Gwarzo’s suspension, started May 26, 2015, four days after his appointment as the DG . He had requested to be paid the sum of N104.8 million as severance package in respect of the end of his appointment as Executive Commissioner, a position he occupied for two years and four months.

 The request, made via a memo dated May 26, 2015, was referred to Mrs. Chukwuogor Frana, acting Head of the commission’s Legal Department at the time, for consideration and advice. However, responding in a memo dated May 27 2015, Mrs Chukwuogor advised against honoring the request made by the then DG, arguing that the fact that he remains in the employ of SEC disentitles him to a severance package.

Citing an extract of the SEC Board meeting held on July 11 2002, Mr. Gwarzo had argued that he was entitled to a severance package. While offering advice matter, Chukwuogor wrote: “The extract, however, does not contain the term ‘severance benefits.’ Therefore, to give an opinion on this matter, it is impossible to determine the purpose and scope/application of this extract.”

She also drew attention to the fact that opening line of the extract relied on by Mr. Gwarzo simply stated that the SEC management made submissions for the payment of retirement/resignation benefits to political appointees. He argued that while the policy specifies political appointees as Director-General and full-time commissioners, the words “resignation and retirement” appear to restrict the circumstances in which certain categories of persons could benefit from the policy.

The acting Head of the Legal Department argued that “retirement” refers to the expiration of the statutory tenures of beneficiaries, while resignation connotes the termination of services with the commission on account of resignation or other circumstances before the expiration of the stipulated statutory tenure.

“The usage of the terms, “resignation and retirement” can be interpreted to mean that the policy contemplates/assumes that the beneficiary has completed his or her service and has completely disengaged from the commission. Due consideration should, however, be given to the peculiarities of the appointment of the Director-General before the expiration of his term as Executive Commissioner.

It is for this specific reason, therefore, that the Human Resources Department will need to provide the proper heading/articulation of the unique circumstances presented by the appointment. This is important because the use of the heading “Severance Benefits” in the payment request indicates that the beneficiary has left or is leaving the services of the commission through retirement or other contemplated ways,” she wrote.

Despite the advice, the severance package requested by Gwarzo was paid by SEC into his Guaranty Trust Bank account (0023868895). The payment which allegedly amounts to earning wealth illegally, is in contravention of the Economic and Financial Crimes Commission (EFCC Act), the Criminal Code Act and the Code of Conduct for Public Officers.

In 2015, the year Gwarzo became SEC D-G, the commission bought three cars Stallion NMN Limited, manufacturers and distributors of Nissan automobiles, as project vehicles.

However, he allegedly diverted one to personal use and gave others to two Executive Commissioners at the time. This ensured that no member of staff or any project team has been able to use the vehicles since they were purchased, as they were kept at the personal residences of the then DG and the Executive Commissioners until the expiration of the former’s tenure in January 2017, when the vehicles were returned to the commission.

Gwarzo, up till date, is said to be in possession of the one of the cars. Sources at the Commission say his Special Assistant, Mr. Daiyabu Kurfi, uses the vehicle as a status car despite the fact that his grade as Assistant Director entitles him to a monetized car grant/allowance (in lieu of car) and has been paid the amount to which he is entitled.

On June 8 2015, documents showed that the DG collected N84.4million as monetized car grant/allowance for four cars. According to the documents, the money was paid into Gwarzo’s bank Guaranty Trust Bank Plc account (No. 0023868895).

The DG was also accused of awarding contracts to himself, his family and other directors of the commission, who have interests in various companies to which contracts are routinely awarded.

A major beneficiary of contract awards, documents showed, is Outbound Investment Limited (RC No. 807317) and which search at the Corporate Affairs Commission (CAC) linked to Mr. Gwarzo and his two brothers in-law, Messrs. Suleiman Mustapha and Kaloma Dahiru Mustapha as the directors. Since the assumption of office as D-G by Mr. Gwarzo’ Outbound Investment Limited was said to have  exclusively supplied diesel to SEC.

The company has also supplied air conditioners to SEC’s zonal office in Lagos and refrigerators to the commission. Payments for jobs awarded to the company by SEC are made into its account (Number 1016723428) domiciled at the United Bank for Africa. Sources at the commission also disclosed that the company has executed numerous other contracts awarded by SEC.

Also creaming off at the commission is Medusa Investments Limited (RC No.326829), where CAC documents also showed that Mr.Gwarzo is a director along with his wife, Khadija Mustapher. The SEC D-G is also a signatory to the company’s Guaranty Trust account (No. 0023953920).

Another company that the Gwarzos are also linked to is Northwind Environmental Services (Registration No. BN 2389176), which was registered in February 2016. A search at the CAC revealed the proprietor as Mr. Haris Haliru Gwarzo, younger brother to the SEC D-G.

Northwind is the sole provider of cleaning services to the commission’s zonal office in Kano since Mr. Gwarzo assumed office in addition to a variety of other contracts. The company gets paid for jobs executed through its account (No. 0095179297) held at Diamond Bank Plc.

Mr. Gwarzo’s personal interest in the identified companies is a clear contravention of the regulation, which explicitly prohibits public officers from being in situations that bring their personal interest into conflict with their public duties. Also, the use of the companies as suppliers to the commission, said government sources, amounts to earning wealth illegally and contravenes the EFCC Act as well as the Code of Conduct for Public Officers.

Companies belonging to staff of the commission that are close to Gwarzo are also said to be beneficiaries of the alleged sleaze in the agency.

Among these are Tida International which investigations at the CAC showed the directors as Mr. Abdulsalam H. Naif, SEC’s Head of Media Department, and his siblings and other members of his family. They include Abdusalam Habu, Abdusalam Jamai, Abdusalam Fuad, Abdusalam Alwan, Abdusalam Amar and Abdusalam Zawad.

The company has been a major supplier of office equipment to the commission, in addition to others since Mr. Gwarzo assumed office.

Gwarzo’s friends from whom the suspended DG allegedly takes kickbacks were also accused of being beneficiaries of the commission’s wonky tender process.

Kickbacks for Gwarzo are allegedly paid into the account (No. 0023953920) of Medusa Investments Limited at Guaranty Trust Bank.

Companies in this category include Outlook Communication, which has Messrs. Ahmed Mohammad Jamila, Yahaya Karami Haulatu and Aisha Ahmad Aisha as directors. The company has benefited from a steady stream of contracts including publishing and media consultancy from SEC under Mr. Gwarzo. The company is paid for jobs executed through its account with Jaiz Bank (No. 0000642716).

Another company allegedly used to siphon funds is Acromac Nigeria Limited (RC No. 10687864), whose directors are Messrs. Abdulahi Dahiru, Mahmud Dahiru Barkindo and Nura Ali Rano.

While Gwarzo was at the helm, Acromac is said to have constantly received patronage through the execution of contracts, including the supply of photocopiers, office furniture and other office items to the Nigerian Capital Market Institute (NCMI), a subsidiary of SEC. Documents show that payments to the company are made through the company’s account (No.1013495360) with Zenith Bank.

Yet another favorite of Mr. Gwarzo is Balfort International Investment Limited (RC No.109153). Its directors, are said to be Messrs. Dahiru Abdullahi, Ali Nura Rano and Dahiru Halima Bello.

The company is a major supplier of office items to SEC and the NCMI in addition to various other jobs it regularly gets. It is paid through its Zenith Bank account (No. 1013495377).

Equally favored by the SEC DG is Interactive Worldwide Nigeria Limited (RC No. 779442), which has Messrs. Tukur Umar, Saratus Abubakar Sadiq and Uzoma Nwakuche as directors. The company has maintained a hold on contracts awarded for the fumigation of the SEC head office, NCMI and the Lagos Zonal Office in addition to many others.

The DG’s catalogue of alleged misdeeds include siphoning money through the commission’s annual staff training.

Prior to his appointment, SEC regularly pay between N60,000 and N150,000 on each staff to top-tier training institutions such as the Institute of Chartered Accountants of Nigeria (ICAN), Nigerian Institute of Management (NIM), Financial Institutions Training Centre (FITC), Nigerian Institute of Advanced Legal Studies (NIALS), Lagos Business School (LBS) and the Centre for Management Development (CMD) to provide training for staff of the commission.

Curiously, under Gwarzo, SEC began paying amounts that range between N700,000 to N780,000 on each staff. The sums, sources added, are paid to quack training firms run by Mr. Gwarzo’s friends and associates. Some, added insiders, impersonate reputable foreign training organizations.

“The training institutions are evidently owned and managed by Nigerians and run locally. This unfortunately led to poor quality training programs for the commission’s staff, which implies that SEC paid much higher for lower quality,” explained a source.

Gwarzo’s alleged fondness for living large at public expense is not restricted to diverting project cars to personal use. Documents show that in October 2016, he received about N6million from SEC as payment for business class air ticket fare to travel to Hong Kong, where he was to attend the International Organizations of Securities Commission (IOSCO) Board meetings. The memo requesting for the sum, dated August 26 2016, was signed by Mr. Naif Abdusalam of the Corporate Communications Department and the money, according to documents was paid into Mr. Gwarzo’s account (No. 0023868895) at Guaranty Trust Bank.

This payment was in contravention of an April 2016 directive of the Federal Government (Vide Circular Ref. No. SGF. 6/S.2/X/545 of March 31, 2016), which explicitly states that all Chief Executives, Directors-General and other officials of similar ranks in Federal Government parastatals and agencies must undertake local and international travels in economy class.

On October 10, 2017, Gwarzo also approved the sum of N2, 624,636.65 for a member of the House of Representatives Committee on capital market to travel on Business Class Ticket to IOSCO Board meeting in Madrid Spain from October 18-20. Similary, the SEC also bought Business Class Ticcket for Mr. Foster Ogala to attend the IOSCO Growth and emerging markets committee meeting and Annual Conference from September 20-21 in Sri Lanka.

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