Chinenye Anuforo

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More than three months after the Securities and Exchange Commission (SEC) declared its intention to conduct a forensic audit on the operations of Oando Plc, the Nigerian investment community and other stakeholders are beginning to express some consternation over attempts to sweep the matter under the carpet.
SEC had late last year given its word that the audit on activities of Oando Plc would continue after a Lagos court gave an order setting aside the prayers of the company to stop the process.
In a letter dated December 5, 2017 addressed to Oando, the commission communicated to the company that the audit would commence December 6, 2017. But till now, there are still no indications that the company is under probe.
Prior to the ongoing confusion on the oversight function of SEC at the Nigerian capital market, there has been allegations in most circles that SEC’s insistence to proceed with the audit had led to the suspension of its Director General, Mr. Mounir Gwarzo, by the Minister of Finance, Mrs. Kemi Adeosun.
Stakeholders, last week, alleged political intrigues and power play at the highest level, after a protracted dispute between Oando and a major shareholder of the company, Dahiru Mangal, was reported to have been resolved. The decision has put in doubt the possibility of a proposed forensic audit of the company by SEC.
According to the notice on Nigerian Stock Exchange (NSE) website, the ‘peace deal’  had been arrived between Mangal and Mr. Wale Tinubu following the intervention of the Emir of Kano, Muhammadu Sanusi.
The notice, signed by Oando’s Chief Compliance Officer/Company Secretary, Ayotola Jagun, and its Head of Corporate Communications Unit, Alero Balogun, said the company has been officially notified by Mangal that he is a substantial shareholder in the company.
“In accordance with the Companies and Allied Matters Act, Cap C20, LFN 2004 (CAMA), an individual or entity with direct/beneficial share ownership over 10 per cent constitutes a substantial shareholder in the company,” the notice said.
“In addition to confirming his status as a substantial shareholder, all the issues raised by Alhaji Mangal in his petition to SEC have been successfully addressed and clarified by the company.”
But some shareholders group and capital market stakeholders have vowed never to allow the planned audit of the oil marketing and prospecting firm be swept under the carpet since doing so would send wrong signals to the global business community.
Reports had it that Adeosun had in a meeting with the suspended SEC boss on November 27, 2017, verbally instructed Gwarzo to discontinue the Oando probe, which he apparently objected to after explaining that stopping the probe would affect the Nigerian economy and send wrong signals to foreign investors.
The question many are asking today remains: Is SEC still Nigeria’s apex capital market regulator or another toothless bulldog that is pliable to political office holders?
If it is a capital market regulator, why is government of the day resisting its move to sanitise the market and improve its governance machinery?
Already, the sordid state of affairs in the market has got shareholders and the investment community terribly agitated as to what has become of that audit.
For instance, the National Coordinator of Oando Shareholders Solidarity Group (OSSG) Mr. Clement Ebitimi, at the weekend, insisted that the audit must hold since it is going to set a standard for other African countries. The group, however, warned  that sweeping audit under the carpet could send the wrong signal to the market and that SEC, as the regulator of the market, deserves to show that it is playing clean if the process was not manipulated.
“If at the end of the investigation, Oando was found not to have committed the breaches it was accused of, then it would have cleared the doubt in the minds of people that the company is clean. But if on the other hand the company is found culpable, then it will have set a standard in the market among other companies that they should play by the rule and not what pleases management since there is a watchdog waiting at the flanks to check governance breaches.”
According to Gbadebo Olatokunbo, a shareholder activist, Oando and its leadership team ran into troubled waters last year when Mangal and one of the founders and majority shareholders of Intels Nigeria Limited, Mr. Gabriele Volpi, moved against Tinubu over the control of the company, citing mismanagement, cooked books and huge debts.
But the above settlement was the Nigerians’ way of sweeping bad things under the carpet. “Have the books been checked? What happened to the cooked-books as stated in the petition? What were the assurances that such wouldn’t reoccur again? What happened to the mismanagement allegations?” he asked.
He added that Oando should have proven itself right by allowing the forensic audit in order to clear the doubts on the state of the account of the company to shareholders.
“We respectfully demand accountability, respect to corporate governance, justice and fair play from the board and management of Oando going forward because the company, Oando, has not been fair to its investors in several ways and that is the reason the company should have been investigated, than the said resolution.”
Another stakeholder who spoke on the condition of anonymity said SEC, as the regulator of the market, deserves to show the market that it is playing clean and has respect for the corporate governance code by ensuring that the audit report is done.
“For most stakeholders, the Oando forensic inquest would stand as a test case for Nigeria’s market integrity from both the regulators and operators. It has already got the global investment community interested as they are now watching to see what becomes of the audit,” he said.
Also commenting on the development, the Chief Executive Officer, Assets Management Limited, Mr. Johnson Chukwu, said, “this is a public quoted company and thousands of Nigerians are shareholders. So, the allegations that border on corporate governance abuses, irrespective of where the allegations came from, or sustained by the persons who made the allegations or withdrawn, as long as the company is a quoted company, whatever concerns the company concerns alot of Nigerians.
“SEC has a compelling reason to ensure that it carries out investigation and reaches a conclusion and informs the investing public of the outcome of the investigation and Mangal and other directors of Oando with concise details should not stop that investigation. If it (SEC) stops the investigation, it will put a question mark on the integrity of our market and regulators. And so, I think SEC should be knowledgeable enough not to abort whatever investigation it is carrying out until it arrives at a conclusive outcome.”
However, Mr. Boniface Okezie, the President, Progressive Shareholders Association of Nigeria (PSAN), reacting to the development, asked if the NSE has lifted the suspension on Oando yet. He said, “this is what we told them last year when they had the AGM in Uyo. We told the board to dialogue before that petition was posted on the media and newspapers and that it will not help the company to move forward; that all they need to do is lower their egos and pride and reconcile with the Mangal group if they really invested in the company. Since they want to know the day-to-day activities of what is going on, they should have a representative on the management and board as well. I don’t have a quarrel with that because during crisis like this, the ground suffers when two elephants fight, meaning that the minority investors suffer over these crises. Investors want to realise their money that has been traded on Oando so I think resolving the issue is a way to go.”
On the forensic audit, he argued that since the petitioner has withdrawn his petition, SEC should not go ahead with the audit. He said, “it was based on the petition that the forensic audit was instituted. So, if the petition has been withdrawn, what instruments will SEC use in investigating?”, he asked.
“SEC has to take its hands off completely for further investigation. Then the suspension of Gwarzo by the Finance Minister should be lifted because you cannot settle one and the other remains pending because ultimately what led to the crisis in SEC was as a result of this Oando issue. So let Gwarzo go back to his duty post and let the probe by the National Assembly cease.”