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Nigeria’s SEC Head Oteh Sent on Compulsory Leave by Board

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June 13 (Bloomberg) -- Arunma Oteh, director-general of Nigeria’s Securities and Exchange Commission, was sent on “compulsory leave” to enable an independent investigation of allegations of mismanagement, the market regulator said.

The decision followed an audit of spending on celebrations of the 50th anniversary of the capital market, Edosa Kennedy Aigbekaen, the secretary to the commission, said today in an e-mailed statement. It was recommended to the board “that the key actors in the management of the funds should be asked to step aside to allow an unhindered investigation,” he said.

Daisy Ekineh, SEC’s executive commissioner for operations, will temporarily act as director-general, according to the the statement. Oteh didn’t immediately respond to an e-mailed request for comment. An official who answered a call to the agency said Oteh had made representations to the appropriate authorities and wasn’t available for comment.

A former vice president at the African Development Bank, Oteh took over in January 2010 as head of the market regulator in sub-Saharan Africa’s second-biggest economy following a stock market crash in the wake of the global financial crisis. Oteh took steps she said were aimed at ending abuses including price manipulation and weak corporate governance.

Vested Interests

“This is actually a manifestation of that battle between regulatory autonomy and vested interests,” Bismarck Rewane, chief executive of Financial Derivatives Co. and a member of the Council of the Nigerian Stock Exchange, said in a phone interview from Lagos. “All of these people were members of the board when the market infractions took place and what did they do?”

With the tenure of the board due to end in two days on June 15, it was curious that members “would take such a fundamental decision to the tenure of the chief executive of an organization,” Rewane said.

“While we are not familiar with the details of Oteh’s tenure at the SEC,” Nigerian authorities “should be careful not to sideline her on the grounds of her alignment with the reform program as this would send a very bad signal to the markets,” Gregory Kronsten and Olubunmi Asaolu, analysts at FBN Capital Ltd., wrote in an e-mailed note today. “Nigeria has an ambitious reform program, which vested interests make periodic attempts to derail.”

To contact the reporters on this story: Emele Onu in Lagos at eonu1@bloomberg.net; Vincent Nwanma in Lagos at vnwanma@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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