The world over, the bedrock of a well-ordered, prosperous and sustainable society is built around respect for the rule of law, due process and strong institutions and not on individuals, personalities or patronage systems and/or networks. Countries with strong inclusive institutions – rule of law, secure property rights – outperform those with mainly extractive institutions built around elites and personality cults economically over time. And this is for good reasons. The fortunes of countries with strong inclusive institutions are not tied to the whims and caprices of individuals, but on established and enduring institutions that do not regard personalities. This ensures predictability and freedom to conduct business and economic activities, which leads to sustainable growth and development. More impressively, countries with strong inclusive institutions could survive weak or corrupt leaders and more often than not have structures to limit the damage such leaders can make to the system. However, the fortunes of countries with weak or extractive institutions are easily tied to personalities and strong men and these countries easily succumb to corruption, mismanagement, nepotism, patrimonialism and prebendalism.
Sadly, in Nigeria, even governments that claim to operate on the basis of rule of law have found it difficult to be truly guided by the fine principles of rule of law and due process and always intervene to sway outcomes in favour of certain individuals and organisations. This arbitrariness, more than anything else, frustrates efforts to build strong and sustainable institutions and portray us an unpredictable country that cannot be relied upon to allow processes or laws run their normal courses without undue interferences.
It is in that light we view the allegation of interference by the Minister of Finance, Kemi Adeosun, on the probe of Oando Plc by the Securities and Exchange Commission (SEC) worrying. According to reports, following a petition and preliminary investigations that showed Oando Plc in numerous breach of the Investments and Securities Act (ISA), SEC, in compliance with its establishment laws and powers, decided to constitute a team led by Akintola Williams Delloitte to do a forensic audit of the company. However on Monday 27th November just as the audit was to commence, according to reports, the Minister invited Gwarzo to another meeting in which she informed him verbally that the investigation should not be carried out but rather a penalty should be imposed on Oando. Documents seen by BusinessDay show that the next day Tuesday 28th of November, Gwarzo the SEC DG wrote a letter addressed to the Minister of Finance highlighting implications of not carrying out the planned investigation.
Pronto, on Wednesday 29th November, the Ministry of Finance announced the suspension of the Director General of SEC from office ostensibly on the strength of allegations of financial impropriety against the Director General.
Without prejudice to authenticity of the allegation against the SEC DG, we feel the timing of the suspension raises questions about the real intentions of the Minister. We are concerned about the damage such an action could have on the Nigerian capital markets due to the appearance of state capture by a firm and inability of an independent regulator to conduct investigations on a firm it regulates.
We feel it is important for SEC to be allowed to carry out its statutory responsibilities to regulate investments and securities business; act in the public interest to protect investors; and prevent fraudulent/unfair trade practices relating to the securities industry in Nigeria.