27 Oct

Daily Watch – SEC rocked by DG severance scandal, NIPOST to offer NigComSat-1R services

  • The director-general of the Securities and Exchange Commission, Mounir Gwarzo allegedly received a severance package of ₦104 million from the commission shortly after he was named DG in 2015. He was an SEC executive commissioner when former President Goodluck Jonathan appointed him to lead the regulator on May 22, 2015. On assuming office as DG, Gwarzo allegedly paid himself the hefty package as an entitlement for being an executive commissioner for two and a half years, according to multiple reports citing documents shown to lawmakers. In a petition to the House of Representatives, Gwarzo was said to have demanded a severance package entitled to a commissioner on assuming the SEC top job, despite opposition by the acting head of the regulator’s legal department. The petition also accuses Gwarzo of awarding contracts to companies controlled by his family and friends, in violation of SEC rules, saying these companies were “used to carry out illegal transactions”.
  • The Aggregate Technical and Commercial Collection losses for the 11 Electricity Distribution Companies in Nigeria remained high above 40 percent in 2016, three years after the power sector’s privatisation according to the Daily Trust. When the 11 distribution firms were privatised in November 2013, the operators were bound by their performance agreements to reduce their ATC&C losses to below 20 percent within the first five years of operation to improve revenue generation and make the networks more efficient in delivering power to Nigerians. However, third-year performance data obtained from the NERC showed that only Abuja and Kaduna DisCos were able to reduce their ATC&C losses in 2016. While Abuja Electric dropped its losses by six percent, Kaduna Electric reduced its losses only by one percent. The other DisCos did not see any drop in their losses drop target, recording significant rises in the losses as high as 13 percent for Ikeja and Jos DisCos.
  • The Financial Reporting Council of Nigeria is revisiting plans to reintroduce its proposed harmonised National Code of Corporate Governance that was suspended by the federal government earlier this year under a cloud of controversy. The NCCG was suspended following concerns raised by private sector operators with certain aspects of the code and the announcement by the General Overseer of one of Nigeria’s biggest Christian denominations, Enoch Adeboye of the Redeemed Christian Church of God that he was stepping down as head of the church in compliance with the tenure limit stipulated by the code of conduct not-for-profit bodies. Adeboye’s decision to step down as head of the church prompted President Muhammadu Buhari to fire the former FRC executive secretary, Jim Obaze. The new executive secretary, Daniel Asapokhai told Thisday that a board committee to supervise the planned reintroduction of the code has been constituted and a draft document would be presented to the public within the next six months for input and suggestions.
  • NIGCOMSAT plans to deploy services on its NigComSat-1R through the facilities of the Nigerian Postal Service to boost broadband penetration, according to the agency’s head of media, Stephen Kwande. He said the collaboration is expected to enhance the government’s inclusive services such as cash-on-point, cash-based disbursement in remote areas in the six geopolitical zones. NIGCOMSAT will provide communication links especially to the underserved areas where broadband penetration can be deepened. The scheme is expected to see ₦2 billion disbursed monthly using NIPOST’s platform all over the country.
  • Seplat has reported a loss after tax of ₦1.6 billion for the nine months ended September 30, 2017. This, however, represents a significant reduction in its loss position when compared with a loss of ₦24.1 billion in the corresponding period of 2016. The petroleum exploration firm, which is dual listed in Lagos and London, said it recorded revenue of ₦85.2 billion, up from ₦49.9 billion in 2016, while its cost of sale fell from ₦30.7 billion to ₦47.1 billion in 2017. Operating expenses fell marginally from ₦17.6 billion to ₦17.2 billion. But net finance cost jumped from ₦8.3 billion to ₦17 billion. The company ended the period with a loss after tax of ₦1.6 billion, compared with ₦24.1 billion in 2016. According to the company, its gas business continues to grow, increasing its contribution to revenue by 11 percent. Seplat gave full year working interest production guidance of 17,000 to 19,000 bpd of oil and 105 to 115 MMscfd (or 35,000 to 38,000 bpd) of gas.