LAGOS, June 12 – The board of Nigeria’s stock exchange regulator has ordered its director general, seen as a reformer hired to clean up capital markets after a crisis brought them close to collapse, to take compulsory leave, pending an inquiry into its financial affairs.
Securities and Exchange Commission (SEC) Director General Arunma Oteh was appointed in 2010 in an effort to flush out fraud and financial rot that sparked a banking crisis in 2008, wiping 60 percent off the value of shares.
Market players fear it could endanger reform efforts if she is squeezed out permanently.
A statement from the commission said Oteh was being investigated for her financial management of the Project 50 programme – an international conference in November last year to celebrate 50 years of capital markets in Africa’s second biggest economy.
It did not make it clear what the allegations are.
“The Board of the Securities and Exchange Commission (SEC) at … has directed the Director-General, Ms. Arunma Oteh to proceed on compulsory leave to enable an independent investigation to be undertaken in respect of the Project 50 programme,” a statement on Tuesday said.
Oteh was not immediately available for comment.
In the past two months, Oteh has been subjected to a parliamentary inquiry into her conduct that her supporters say is politically motivated, during which she hit back at lawmakers she accused of trying to extort money from her.
One of those lawmakers, head of the committee Herman Hembe, is being investigated by the corruption watchdog for allegedly demanding a bribe from Oteh during the inquiry.
The board said its move to force her to go on leave was partly in accordance with a recommendation by the parliamentary committee on capital markets that she be investigated.
During the inquiry, Oteh said the stock exchange had been riddled with fraudulent accounting before she arrived that saw share-price manipulation, insider trading and millions of dollars misspent on a yacht and Rolex watches.
Some analysts suspect corrupt individuals sanctioned by her clean up are fighting back. The move follows two bills being proposed in Nigeria’s parliament that would seriously hobble the independence of central bank governor Lamido Sanusi, a reformer critical of excessive government spending.
During a $4 billion banking sector bail out, Sanusi went after powerful elites suspected of fraudulently inflating assets, sacking eight bank heads whom many thought untouchable. He has also been a vocal critic of graft in government.
“The same corrupt people are fighting back,” said Bismarck Rewane, CEO of Lagos-based consultancy and friend of Oteh’s.
