• Shareholders Urge Harder Sanctions
• Say Commission Not Moved By Lawmakers’ Action
• It’s All Politics — Lawyer
THE zero-budget punishment meted out to the Securities and Exchange Commission (SEC) by the angered National Assembly (NASS) notwithstanding, a section of portfolio investors in the country want stiffer punishment for the capital market regulator, which, in a chat with The Guardian, they described as “busy body.”
Surprisingly, National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), Mr. Sunny Nwosu, said the “punishment” is ineffective, as the Commission was never on national budget and would continue to spend from its huge collections from capital market operators, including the stockbrokers.
“The National Assembly never starved them of funds because SEC had never been on budget. What the National Assembly should have done to punish SEC is to tighten up the other areas they collect direct payment from operators,” Nwosu said.
Accusing SEC of highhandedness, Nwosu said since the Commission had not been on national budgets before the current crisis, the lawmakers are only fighting to ensure they (NASS members) bring it under their control, a move, the chief shareholder said does not really ruffle SEC.
“SEC is a busy body. They are not doing anything. They are creating more problems in the country. I have represented them on one of my projects saying they should put them on National Budget but they didn’t like it because they cannot freely use money the way they want. The National Assembly wanted to put SEC on national budget, they required SEC’s budget because of the pride of the Director-General.
“The fact is that SEC prefers being independent of national budget. These people (the operators) can always pay penalty and it is paid straight to SEC. They are not even happy with SEC, it’s just because they are their regulator, they will always play deaf and dumb because of the impunity of the regulators,” Nwosu alleged.
But SEC would rather keep mum than comment on the “delicate” matter. Asked to shed light on how it survives in the face of zero allocation, a senior official of the Commission said, although it has not been easy, SEC has managed to carry out its responsibility. When The Guardian called him on his mobile phone, the following conversion ensued:
We just want to know how SEC carries on with this zero budget from NASS…
Ah, my brother I cannot comment on that. The matter is beyond me. It is not easy for us but we are performing our responsibility.
How do you get the money for all that you have been doing?
My brother I told you I will not like to comment on this. Bye.
The issue of allocation for SEC is expected to form part of “issues on the table,” as NASS resumes from its two-week break to mark end of 2012/2013 legislative session on Tuesday.
Indications are that debate will begin immediately on the 2013 Appropriation Amendment Bill, which President Goodluck Jonathan, had, in a letter addressed to the President of the Senate, Senator David Mark and Speaker, House of Representatives, Aminu Tambuwal, sought amendment to certain clauses in the 2013 Appropriation Act.
One of the key issues highlighted for lawmakers’ consideration was the zero allocation for the regulating agency for Nigeria’s capital market – SEC.
In a telephone conversation, Chuks Nwachukwu, a lawyer, yesterday, said politics, rather than law, is driving the whole issue. “This is all about politics, because the lawmakers passed a resolution saying that the woman (SEC DG) should go; but the Presidency does not respect that.”
He, however, said the lawmakers’ action could cripple SEC as a statutory body charged with specific responsibility, which it must discharge.
“So, refusing to appropriate funds to it means you are crippling it. Not allocating funds to it is abuse of power,” Nwachukwu stressed.
“But I can understand the legislator,” he said on the contrary. “They are concerned that the board was not properly constituted. They say the head of the body should be relieved of her position.”
Not only did the National Assembly refuse to appropriate money for SEC, it has also, under, Item 9, Part E, Clause 10 of the 2013 Appropriation Act, withheld the power of the Commission to spend any money generated by it for either its Current or Capital Projects without the approval of the National Assembly.
That part of the Appropriation Act says: “All revenue, however, described, including all fees received, fines, grants, budgetary provisions and all internally and externally generated revenue shall not be spent by the security and Exchange Commission for recurrent or capital purposes or for any other matters, nor liabilities thereon incurred except with prior appropriation and approval by the National Assembly”.
Of course, President Goodluck Jonathan has not been comfortable with the National Assembly’s position on the SEC issue. Since the Commission’s allocation does not form part of the core budget, he believes the clause ought not to have been inserted in the Appropriation Act.
The President, in his letter to NASS, said: “Considering the fact that the budget of the Securities and Exchange Commission does not form part of the core 2013 Federal Budget as presented to the National Assembly, I believe that this clause ought not to have been inserted in the 2013 Appropriation Act in the first place”.
Jonathan also underscored the implication of the clause on the existence of the Commission. According to him, such decision is “tantamount to shutting down the business of the Commission with a potential negative impact on the capital market”.
Although the Senate had earlier included SEC in its appropriation, it later succumbed to pressure from the lower chamber, whose stance on zero allocation to the Commission was not unconnected with the Presidency’s reluctance to sack the Director General of SEC, Ms Aruma Oteh, as requested by the House of Representatives.
Until debate commences on the 2013 Appropriation Act however, the Commission would have to rely on Senate’s earlier promise to consider its position in the spirit of ‘give and take’.
Senate’s Committee Chairman on Information, Media and Public Affairs, Senator Enyinnaya Abaribe, had, in the heat of this face-off, told journalists that the decision to starve the Commission of funds in the 2013 budget was based on the report of the conference committee of both chambers.
He said: “What happened was that there was a Conference Committee set up between the House and the Senate on the 2013 Appropriation and the result of the Conference Committee is what is in the 2013 budget.
“Of course Mr. President indicated in the letter to the Senate and the House of Representatives that there are certain aspects of the 2013 budget which is already signed into law that he wants us to revisit and definitely, we are going to revisit those aspects. That is the process of give and take within government”.
On the refusal of the Presidency to remove Oteh in accordance with the decision of the National Assembly, since 2012, Deputy Chairman, House of Representatives Committee on Media and Public Affairs, Victor Ogene said, “ the House has not shifted grounds. Whatever happens now in SEC that is contrary to the position of the House is in breach of the law.”
“At the appropriate time if it is discovered that funds are made available to SEC, contrary to the position of the House, it will amount to an illegality. The Appropriation Act cannot be breached; it is one of the most important Acts in any democracy. Action will be taken against whoever is responsible,” he stressed.
Source: Guardian
