As Gwarzo has his Day in Court

L-R: Suspended Director-General of the Securities and Exchange Commission (SEC), Mr. Mounir Gwarzo, with his counsel, Mr. A.U. Mustapha, during the hearing of the fraud case brought by the ICPC against the DG at the FCT High Court Abuja on June 28, 2018.



It is no longer news that the suspended DG of the Securities and Exchange Commission (SEC) is currently having his day in court to defend himself of the various allegations of financial
Impropriety levelled against him.

Recall that a variety of fraudulent activities dogged Gwarzo’s tenure as DG, hence his being docked by the Independent Corrupt Practices and other Related Offences Commission (ICPC).

Only four days after receiving his appointment letter, May 26,2015 to be precise, Gwarzo requested that he 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 on the 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. She 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 however, the severance package requested by Gwarzo was paid by SEC into his Guaranty Trust Bank account (0023868895). The fraudulent receipt of the sum, amounts to earning wealth illegally, an action in contravention of the Economic and Financial Crimes Commission (EFCC Act), the Criminal Code Act and the Code of Conduct for Public Officers.
But that was just one of Gwarzo’s fraudulent activities that would see him dipping his hand into the coffers of the Commission at will.

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 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 was 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.

In continuation of his corrupt tendencies, Gwarzo collected a car grant of N49,425,700 as an executive commissioner in SEC, while he was paid the grant of N84.388million as DG.

According to the documents, the money was paid into Gwarzo’s bank Guaranty Trust Bank Plc account (No. 0023868895).

The DG would follow the diversion of government property up with fraudulent acquisition of wealth. This he has done through the cornering of contracts for 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). A search at the Corporate Affairs Commission (CAC) showed that Mr. Gwarzo and his two brothers in-law, Messrs. Suleiman Mustapha and Kaloma Dahiru Mustapha, are the directors of the company. Since the assumption of office as D-G by Mr. Gwarzo, Outbound Investment Limited has 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 vehicle through which the Gwarzos were illegally amassing wealth 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.
These and many other infractions led to his suspension by the Honourable Minster of Finance, Mrs. Kemi Adeosun who stated that the suspended SEC boss abused his office and violated the provisions of Sections 57 (12) (b) and 58 (5) of the Public Procurement Act, 2007 in the awards of contracts during his tenure.
An Administrative Panel of Inquiry was set up and last December, recommended Gwarzo’s dismissal, as Director-General of the Securities and Exchange Commission (SEC), from the Public Service.
This, it said is 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 27th October, 2009)(engaging in extra budgetary expenditure without appropriate approval).”

Among others, Administrative Panel of Inquiry (API) set up by the Minister of Finance recommended that Gwarzo be referred to the ICPC for further investigation of the allegation of abusing his office to award contracts to Outbound Investments Limited, contrary to the provisions of Sections 57 (12) (b) and 58 (5) of the Public Procurement Act, 2007.

The report said to have been submitted to Mrs. Adeosun, directed, among others, that Gwarzo should refund the sum of N104,851,154.94, being the severance package he illegally approved for himself and received.

“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,” Upshot Reports quoted the report as saying.

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 PSR.”

Recall also that the House of Representatives had said the suspension of the former Director General of the Securities and Exchange Commission (SEC), Mounir Gwarzo stands.

The House, while adopting the report of its Committee on Capital Market and Institutions headed by Rep Tajuddeen Ayo Yusuf (PDP, Kogi) said Gwarzo indeed has a case to answer and that the Minister of Finance Kemi Adeosun was right to have suspended him.

Since Gwarzo is already having his day in a court of law, it is only hoped that justice will be served to serve as a deterrent to public officers with a penchant for dipping their hands in government coffers and also boost the anti corruption crusade of the present administration.


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