Golden Handshake: How SEC board approved N1.7 billion for staff retirement package

Director-General-of-Securities-and-Exchange-Commission-Mr-Mounir-Gwarzo
Sacked Director General of the Securities and Exchange Commission, SEC, Mounir Gwarzo, [Photo credit: Pulse.ng]

The controversial staff retirement package for senior staff of the Security and Exchange Commission, SEC, was conceived and implemented with approval of the commission’s board, documents seen by PREMIUM TIMES show.

The special package, tagged “Golden Handshake” that gulped N1.7 billion was listed by a probe panel among the sins of the suspended director general of SEC, Mounir Gwarzo.

The retirement package, according SEC documents seen by PREMIUM TIMES, was meant to incentivise retirement by top management staff, to reduce the burden of heavy senior cadre on the commission.

With the new policy, two directors, 13 deputy directors, one general manager, five assistant directors, five senior managers, one principal senior supervisor, 13 managers, two senior supervisors and two supervisors agreed the voluntary retirement.

The money spent on the scheme amounts to N1.7 billion.

The investigative panel constituted by the Minister of Finance, Kemi Adeosun, to probe Mr Gwarzo’s tenure, following his suspension, said the money was spent without budgetary or ministerial approval.

The panel recommended dismissal of Mr. Gwarzo over series of alleged infractions, including using front companies, and payment of hefty retirement package to himself. However, internal documents from SEC show that the retirement package and its financing plan was approved by the commission’s board at its sitting on March 12, 2015.

An internal memo containing extract of the minutes from the meeting written by the acting secretary of the commission, Eno Otunba-Payne, with the director general’s concurrence, provides details about the scheme.

The board, relying on its powers under Section 4(d) of the Investments and Securities Act 2007, approved virement of some line items in the commission’s 2015 budget to fund the scheme.

The relevant section of the Act empowers the board to “consider and approve the annual budget of the Commission as may be presented to it by the management.”

A bulk of the fund was then sourced from the commission’s provision for foreign training.

A source said part of the reasons of floating the golden handshake scheme was to utilise the funds that amounts to N754 million earmarked for foreign training, at a time the federal government had placed cap on such trainings.

The memo for the retirement package therefore vired 80 per cent of the foreign training provision, amounting to N603 million for the new scheme.

Additionally, the board approved virement of N350.95 million from capital market development subhead, N160.17 million from “maintenance – equipment”, N249.28 million from “monetized vehicle grant” and N3.14 million from “generator grant”.

Other subheads that had monies cut from them include N7.73 million from “Recreation”, N89 million from “Maintenance – premises”, N52.8 from “Network and Communication”, N48.3 million from “Seminars and Conferences” and N33.6 million from “Insurance” subhead.

Additionally, the commission vired N32.4 million from “Rent and Rates – offices”, N153.75 from “Local travel”, N150 million from “Foreign travel” and N26 million from “Advertisement and Publicity”.

The total vired sum amounted to N1.96 billion.

The ministerial report said Mr. Gwarzo flouted the rules by spending N1.7 billion in the Golden Handshake scheme without getting approval for the expenditure.

However, in his defence, Mr. Gwarzo has told PREMIUM TIMES that the he acted within the extant laws, arguing that the management under him acted in the best interest of the commission.

“When I came into office I realized that the top management was very heavy and we needed to bring incentives for people to take and retire, to create room for fresh energy. Because government had stopped foreign training, we had to use the sub-head for foreign training and vire the funds there to pay the Golden Handshake, which was approved by the Board.”

The finance minister, however, told a House of Representatives hearing on the scandal that she would recommend Mr. Gwarzo’s sack to President Muhammadu Buhari.


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