As the five year tenure of Ms Arunma Oteh as Director General of Securities and Exchange Commission ended on January 7, 2014, Executive Commissioner, Operations, Mr. Mounir Gwarzo, was named acting Director General. This followed the refusal of President Goodluck Jonathan to approve another term for her despite desperate attempts to convince him by Secretrary to the Government of the Federation, Anyim Pius and Minister of Finance, Ngozi Okonjo-Iweala.

The story of Ms Arunma Oteh as Director General of Securities and Exchange Commission (SEC) will commence with the exit of Dr. Ndi Okereke-Onyiuke as Chief Executive Officer (CEO), Nigerian Stock Exchange (NSE), Lagos.

Okereke-Onyiuke joined the NSE on February 21, 1983 and became the first female DG in 2000. In 2010, she became the Chief Executive Officer of the Exchange.

In April 2008, stakeholders called for a change of leadership at both the NSE and SEC over allegations of insider dealings and other market infractions. 2008 was the year that the booming NSE experienced a meltdown and investors lost huge sums of money. The stakeholders had claimed that the failure of the NSE to check the infractions led to a sharp drop in market indices.

By the end of 2008, the NSE’s All-Share Index had dropped by 45.8 per cent to close at 31,450.78, a reversal of the record-setting growth of 74.73 per cent recorded in 2007.

The former Director-General of SEC, Mr. Musa Al-Faki, had resigned on May 8, 2008, citing family pressure but Okereke-Onyiuke did not.

The former NSE boss was expected to give the Council of the NSE her notice of retirement in September, 2010. Sources said she was to proceed on terminal leave that would have ended in December after the notice.

And then, Alhaji Aliko Dangote added his voice to criticisms against NSE and Ndidi-Onyuike. According to Dangote in a petition to SEC, a “Careful review of the expenditure shows major cost elements are salaries, pension, travel and marketing. At the end of 2007, NSE had a cash position of over N9bn and as at today, the Exchange is in deficit and is unable to meet its obligations as and when due”. He further alleged that the NSE had not presented its audited accounts, seven months into that financial year. Though the NSE denied being insolvent, the billionaire business magnate maintained his position, adding that the NSE owed its subsidiary, the Central Securities Clearing System (CSCS), N900m.

It was in the midst of these crises that Arunma Oteh was named Director General of the Securities and Exchange Commission and cleared by the National Assembly. She resumed in January 2010.

With an excellent curriculum vitae showing that she graduated with first class and had gove to such prestigious schools like Harvard and worked with the African Development Bank in Tunisia as Vice-President (Corporate Services), the appointment was received with cheers and enthusiasm by both the Commission’s staff and other stakeholders in the market. There were high expectations, as she promised to bring about positive changes and carry everybody along promised to direct all her efforts towards developing a capital market that is fair, transparent and efficient. She also vowed to reposition the country’s capital market by transforming it into one of the best in Africa and the world. Oteh, who made these promises on Thursday, while formally assuming office at the SEC headquarters in Abuja, also held her first meeting with senior management staff of the Commission.

Speaking while being handed over the mantle by the then acting director general, Ms Daisy Ekineh, Oteh said her envisaged reforms in SEC would be anchored on five pillars including integrity, restoration of confidence in the market; building institutional capacity; broadening and deepening the market; as well as instituting transparent regulations.

She deplored the absence of transparency, which she alleged, had undermined the capital market and soiled its reputation, Oteh said she was committed to eliminating all the incidence of sharp practices in the capital market. “We must continue to send the right signals about the critical importance of integrity and transparency. We have to set high standards in regulatory enforcement and deepen the market in terms of new products and in relation to the equity and fixed income markets, as vehicles of resource mobilisation for development”, she enthused.

Swiftly, Oteh removed Ndi Okereke-Onyiuke as Group Chief Executive Officer of NSE who had just about a month to the end of her tenure. She also stopped Dangote from assuming office as president of the exchange. The steps were seen as being in pursuit of Oteh’s promise to have zero tolerance for corruption and infractions. The statement making these announcements added, “Given the gravity of the allegations around financial mismanagement of the exchange, the commission has also directed the conduct of an independent investigation into the allegations. These actions by the commission reinforce the integrity of our markets and demonstrate commitment to accountability, particularly given the importance of ensuring adequate oversight at all times and demonstrating that when there are shortcomings, as the apex regulator, the Securities and Exchange Commission will step in decisively to address these issues in the public interest and to protect the investors.”

However, just a few months after her resumption however, tongues began to wag as to her administrative and management style.

By August of the same year, staff of the Commission had petitioned President Goodluck Jonathan and then minister of finance Mr. Olusegun Aganga asking for investigation as to why the Oteh spent about N200 million on hotel bills at the Transcorp Hilton Abuja.

In the petition, the concerned staff noted that “Six months after her appointment, she is still living in Transcorp Hilton Hotel, with SEC paying close to N140,000 every night”.

However, concrete evidence from the hotel showed that the Director General resided in the hotel between March 1 to August 17, 2010 and spent N22, 322, 300. 00 (twenty two million, three hundred and twenty two thousand, three hundred naira only).

They also noted that “the woman has no clue on how to run an organisation not to talk of an important one like SEC. This supports our earlier position that the woman is an imposition, as she has no capital market experience. The accounting system is in shambles. All sorts of payments are made. Consultants that do no significant work are paid hefty sums of money”.

Equally fingered in the petition was the SEC Chairman, Senator Udome Udo Udoma, who the workers said “is on part-time appointment but maintains a full office in SEC with full complement of staff.”

The petitioners led one by Kalu Ogba also Aganga of collaborating with the SEC boss by “approving a whooping N100 million for a single trip with almost 20 people? The chairman and herself even travelled first class, when ministers and senators travel business class.”

Although SEC management described the allegations as frivolous, the agitations continued until the National Assembly waded in by instituting a probe.

In April 2012, the House Committee of Capital Markets and Institutions launched a public inquiry into the near collapse of the Nigerian capital market in 2008. There, allegations were made against Oteh including from her staff and management.

Just as the probe was about to commence, Oteh was suspended from office. The SEC board on June 11, ordered Oteh to commence on a compulsory leave to pave way for the investigation of alleged graft in the SEC Project 50. The board announced Ms Daisy Ekineh, Executive Commissioner, Operations, to act in her absence. However, on June 15 Ms. Daisy, a board member, was retired with other board members after the expiration of tenure. Minister of Finance, Dr Ngozi Okonjo-Iweala then appointed Mr. Ibrahim Bolaji Bello as acting Director General, while investigations into Oteh’s alleged shady deals were on.

At the hearing, Oteh fought desperately and used every weapon in her armoury including discrediting members of the committee. She accused Chairman of the Committee, Herman Hembe of collecting money from SEC to attend a workshop in the Dominican Republic but had neither attended the program nor returned the money. The entire committee were also accused of demanding N40 million from the SEC director general to influence the report to be submitted from the probe.

This forced Hembe to step down, saying his resignation is to enable him clear his name and seek legal redress, against the backdrop of accusation of bribery and corruption levelled against himself and members of his committee. In its place, an adhoc committee headed by Hon. Ibrahim Tukur El-Sudi, was set up to continue the probe

Committee members said Oteh ignored a caution later from the Bureau for Public Procurement on the expenditure of N42 million on hotel accommodation during the ‘Project 50’ celebrations. The committee sought to know why SEC, under Oteh, gave approval for the acquisition of Intercontinental Bank by Access Bank at a time when the managing director and deputy managing director of Access Bank were owing Intercontinental Bank N16 billion. Oteh said she would investigate the matter.

The executive commissioners further blamed Oteh for the nationalisation of Union Bank. Udora said he had advised the DG that it was inappropriate for the Asset Management Corporation of Nigerian (AMCON) to take up the losses of N8 billion incurred by Union Bank. “I personally feel somebody should account for the money. My observations were communicated to the DG through the appropriate channel,” he said.The panel confronted Oteh with the several allegations 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. She was also alleged to have allowed two members of  staff of Access Bank Plc, under commission’s supervisory purview in view of its being listed on the stock exchange, to be seconded to SEC, a situation they claimed represented a conflict of interest.

Strangely, all other members of SEC management committee openly disagreed with Oteh on policies, programmes and actions of the regulatory agency thus confirming that the institution was torn apart, with an atmosphere of deep-seated animosity and mutual distrust not only among the top echelon but within its rank and file.

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. Executive Commissioner, Operations, Ms. Daisy Ekineh; her counterpart in charge of Legal and Compliance, Mr. Charles Udora; and that of Administration, Alhaji Sanni Stores, all distanced themselves from being part of any decision to hire contract staff or get personnel seconded from institutions regulated by the  commission.

Mr.  Useni Dauda,  Director of Human Resources told the committee that due process was not followed in the recruitment of some contract workers and alleged that they were unilaterally hired by Oteh on assumption of office and that this category of employees were yet to get the endorsement of the executive management committee and the board of the agency. He confirmed the allegation that the contracts the affected personnel were renewed against the advice of the audit department.

In its report, the ad-hoc committee returned a verdict of guilty as charged.

The El-Sudi Committee report heavily indicted Oteh for various infractions and recommended that she be prosecuted. It recommended “that the appointment of Ms Arunma Oteh be terminated forthwith as director general of SEC  as her appointment is in violation of section 3 subsection 2 and section 38 and 315 of the Investments and Securities Act 2007, in that she did not have 15 years experience in the Nigerian capital market as required; she has shown incompetence in the management of human and material resources at her disposal in SEC, lack of transparency in managing Project 50, regulatory failure in some of the recent mergers, acquisitions and approvals of transactions by the commission and general inability to carry her staff, board and management  in decision-making in the commission and questionable staff recruitment policies.”It “Ms Oteh flies first class when travelling abroad, contrary to government directives that government appointees should fly business class when travelling on official assignment.” In addition, it said Oteh embarked on illegal recruitment of ad hoc and supporting staff, including hiring of two staff of Access Bank as advisers on technological issues. “Findings revealed that contrary to Ms Oteh’s submission, the Access Bank staff members were involved in manipulating the merger and acquisition of failed banks to favour Access Bank, a case of Intercontinental Bank which was acquired by Access Bank is a pointer in this arrangement,” it said.

The House mandated Attorney General and Minister of Justice Mohammed to prosecute Oteh for contempt of parliament under section 4 and 11 of the Legislative Houses’ powers and privileges Act and section 89 of the 1999 constitution.

Rather than this however, government reinstated Oteh.

The letter of reinstatement from Secretary to the Government of the Federation, Senator Anyim read in part: “I am to note that government has studied the report submitted by the external auditors and you are neither indicted for fraud nor criminal breach in any form. However, some administrative lapses were reported, particularly, in cases where administrative procedures were not thoroughly observed.”

Upon getting wind of this decision, members of staff of the commission staged a protest by trooping out with placards against her reinstatement, a development that led to the disruption of work at the head office of the commission in Abuja. They marched around the commission’s premises before a team of security operatives comprising the police and State Security Service (SSS) arrived SEC’s office premises to disperse them.

Oteh eventually returned to her office after Minister of Finance, Ngozi Okonjo-Iweala, held a conciliatory meeting with staff of SEC, in an attempt to placate them to accept the return to office of Ms Oteh.  The workers had said they were not particularly against the government’s decision to reinstate the DG. They claimed that it was vital that issues raised against her in the report of the House of Representatives Committee on Capital Market Probe be exhaustively addressed. The staff said they would welcome Ms Oteh back once the House committee clears her of the allegations against her.

Another damning report by the Fiscal Responsibility Commission (FRC) indicted Ote’s SEC of hiding and diverting funds meant for the national treasury. FRC said the extent of the fraud was so extensive and well worked out that SEC and other agencies deliberately supplied contradictory information to different regulatory bodies — the finance ministry, Accountant General’s office, and the Fiscal Responsibility Commission – to mislead the government, and make it appear they were fulfilling their fiscal responsibilities. While the statements submitted to the OAGF and the Minister/ Budget Office would show the agencies as either profitable or breaking even, those sent to the Fiscal Responsibility Commission would show that they were operating at a loss. The regulatory agencies too, failed to cooperate with each other to combat the violations, effectively helping the defaulting revenue generating agencies defraud the government for years, the Fiscal

Her reinstatement marked the beginning of hostility between President Goodluck Jonathan and the House, which never returned to cordiality.

During her five year reign as capital market regulator, Oteh won some local and international awards including getting high rating from some market operators but the surest way to determine her performance is to see how the market performed and how much wealth it created.

Ike Chioke, managing director at Afrinvest West Africa, a leading investment bank in Nigeria says “She has done a very credible job at the SEC. She came in five years ago, one year after the financial crisis. It was during her time that the needful transformation at the NSE was made to allow the current director-general, Oscar Onyema come on board. The combination of herself and Mr. Onyema created the market that we have today. I think she has done a fantastic job and she should be very proud of her accomplishments. I wish her more positive achievements in her future endeavours,” he added.

Again, Okonjo-Iweala said “The former DG of SEC Ms. Arunma Oteh is a thoroughly smart professional and a hard worker who put in great effort to reform and strengthen the regulatory framework of the capital market, thereby enhancing its performance. She also reached out to tap international knowledge in this regard. We are grateful to her for services rendered.”

But Director General and CEO of Nigerian Stock Exchange, Mr. Oscar Onyema advised stakeholders to perish the thought of the exchange attaining the $1 trillion mark that Oteh envisaged. While presenting the 2014 Market Recap and Outlook for 2015, in Lagos he said going by the current situation in the market and the prevailing environment in the country, the trillion dollar capitalisation may be as good as a wishful thinking.

He observed that bearish sentiments prevailed in the market for most of 2014 as foreign investors divested from the market citing currency risk. “Foreign investors steadily withdrew from the Nigerian market due to currency risk and the recovery of developed economies, and the effects of the US Federal Reserve tapering of its Quantitative Easing (QE) policy. The air of uncertainty that hovered around the Nigerian capital market throughout 2014 caused investors to increasingly adopt a ‘flight to quality’ strategy. Some stocks are below book value, thus, presenting domestic investors with no currency risk, an opportunity for cautious long term investing.”

NSE ended 2014 as one of the worst performing exchanges as the market capitalisation of the listed equities fell by N1.749tn from N13.226tn at the start of the year to N11.477tn. And in the first week of 2015 when Oteh eventually bowed out, NSE was the worst performing exchange in the world.

Data compiled by CNNMoney as of December 24, using benchmark year-to-date performances of exchanges showed that the Nigerian Stock Exchange ranked 72 out of 74 exchanges considered with the NSE All-Share Index at 20.67 per cent negative. A separate report published on December 24 by The Telegraph (UK) ranked Nigeria number three among the worst performing stock markets in 2014, with Columbia and Russia occupying the second and first spots, respectively.