Reps order probe of Finance Minister, Gwarzo’s controversy

House of Representatives

…As Official says .S. Sudan owes Sudan $1.3bn from 2012 oil deal ***

The House of Representatives on Tuesday ordered a probe into the suspension of the Director-General of the Securities and Exchange Commission, Mr. Mounir Gwarzo, by the Minister of Finance, Mrs. Kemi Adeosun, over alleged financial abuses.

At its plenary in Abuja, the House directed its Committee on Capital Market and other financial Institutions to conduct the investigation within two weeks, particularly the allegation that the suspension was as a result of the refusal of Gwarzo to halt the forensic audit of Oando Plc being carried out by SEC on the instruction of the minister.

The House, which was presided over by the Speaker, Mr. Yakubu Dogara, passed the resolution after a member from Bayelsa State, Mr. Diri Douye, moved a motion to table the suspension for debate.

The resolution also asked all parties to maintain the status quo pending the outcome of the investigation by the House.

Adeosun had last week suspended Gwarzo over allegations that he approved N104m severance package for himself while still in service, among others.

Two other top management officials of SEC were also suspended. They are the Head of the Media Division, Mr. Abdulsalam Naif, and the Head of Legal Department, Anastasia Braimoh.

But, on Tuesday, Douye’s motion indicated that the suspension of Gwarzo was reportedly fuelled by the controversy surrounding the Oando forensic audit.

“The House observes that there are allegations of interference by the Ministry of Finance in the discharge ofthe responsibilities of SEC, particularly the Oando forensic audit matter, which was largely responsible for the DG’s suspension,” the motion read in part.

However, in their contributions to the debate, some members called for investigation into the financial operations of SEC, including the alleged abuses by Gwarzo.

For instance, the Chairman, House Committee on Works, Mr. Toby Okechukwu, warned that the matter, if not diligently handled, could once again lead to a drop in activities in the capital market.

He stated, “The payment of severance allowance of N104m to the DG should be investigated. Also, the circumstances of the internal dispute between the DG and the minister should be probed. This is one way to avoid another collapse of the capital market.

“I wouldn’t know why the minister will not allow SEC to do its job. I wouldn’t know why infractions should be swept under the carpet. Nothing less than a total inquiry into what happened in SEC is what is required and not only why the DG was suspended.”

Meanwhile, SEC said on Tuesday that it would go ahead with the forensic audit of Oando Plc.

The commission said this in a letter dated December 5, 2017 and addressed to the management of Oando Plc.

The suspension of Gwarzo by Adeosun last week had been linked to the forensic audit into the financial affairs of Oando Plc.

While the Finance ministry had claimed that Gwarzo was suspended for financial impropriety, but there had been claims that he was actually suspended for his refusal to call off the forensic audit of the oil marketing firm.

But the commission in a statement on Tuesday said a letter had been written to the management of Oando informing it that the audit would go on as planned.

It said the decision to conduct the audit was in line with its zero tolerance for infractions in the capital market.

The statement read in part, “The Securities and Exchange Commission has reiterated its decision to conduct a forensic exercise into the activities of Oando Plc. This commitment is contained in a letter dated December 5, 2017 addressed to Oando Plc.

“The commission wishes to assure the general public of its zero tolerance for infractions in the Nigerian capital market.”

In the meantime, South Sudan still owes neighbouring Sudan 1.3 billion dollars from a 2012 deal that ended a dispute over oil payments between the two nations, former deputy finance minister told Reuters.

According to former deputy minister Mou Thiik, the previously undisclosed amount is equivalent to eight years worth of oil revenues for South Sudan at current prices.

He spoke to Reuters on Friday and was removed from his post by President Salva Kiir later that day.

Finance Minister Stephen Dau did not answer calls or text messages.

Oil minister Ezekiel Gatkuoth also did not answer calls or text messages.

Information minister Michael Makuei said he could not comment on figures.

In 2012, South Sudan shut down oil output after it could not reach an agreement with neighboring Sudan, its former ruler, on payment to use its infrastructure to export crude from its oilfields.

South Sudan eventually agreed to pay three billion dollars to Khartoum in a late 2012 agreement.

South Sudan is also supposed to pay royalties fees for each barrel of oil it exports through Sudan.

Thiik said Juba still owes 1.3 billion dollars of that original amount.

The debt underscores the ruinous state of the economy of the world’s youngest nation amid a four-year civil war that has killed tens of thousands of people, forced four million people to flee their homes and slashed oil output, the main source of revenues.

Juba has not paid soldiers or civil servants for most of this year.

It was not clear if the 1.3 billion dollars debt included the arrears that landlocked Juba continues to rack up with Khartoum, the amount agreed in 2012 was roughly 26 dollars in fees for each barrel of South Sudanese crude piped to Port Sudan.

Sudan has been collecting some of those fees via an oil-for-cash arrangement, in which Khartoum takes cargoes of South Sudanese crude, but arrears are substantial.

The International Monetary Fund estimated that in the 2015 and 2016 financial year, Juba accumulated 291 million dollars in payment arrears related to the 2012 deal.

In the 2017 and 2018 budget passed in August, Juba acknowledged it would continue to accrue debt to Khartoum.

“It is likely that it will not be possible to honor the renewed 2012 (agreement) and make full payments to Sudan,” read the budget on the finance ministry’s website.

Additional report from Punch