Stories by Chinwendu Obienyi
In a bid to sustain investors’ confidence in the capital market, shareholders have asked the Federal Government to wade into the dispute between the Securities and Exchange Commission (SEC) and the management of Oando Plc.
The SEC and Oando Plc have been embroiled in a tango after the commission found out that the oil firm failed to establish an effective system of internal controls over its financial reporting, while suspending activities of Wale Tinubu led administration in 2019.
Prior to this, Dahiru Mangal and Ansbury Incorporated had sent a petition to SEC objecting to the Annual General Meeting (AGM) of Oando Plc, billed for September 2017, over alleged corporate governance breaches by its management. Mangal is a substantial shareholder in Oando Plc while Ansbury is a majority shareholder in Ocean and Oil Development Partners which owns 56 per cent equity stake in Oando Plc. Their petition was for SEC’s intervention to change the management of Oando as they alleged that the management wanted to continue running the oil firm even when its fortunes had been dwindling.
This made the SEC engage the service of Deloitte and Touche to conduct a forensic audit of the activities of Oando Plc. The result of the audit is said to have informed the decision of the SEC to take a thorough action on the oil firm, stating that the findings from the audit revealed serious infractions such as false disclosures, market abuses, internal control failures and corporate governance lapses stemming from poor board oversight, irregular approval of directors’ remuneration, unjustified disbursements to directors and management of the company, related party transactions not conducted at arm’s length, among others.
Expectedly, Oando’s management sought the protection of the Federal High Court, Lagos, insisting that the regulator indeed overreached itself, while the SEC maintained that investor protection was primarily at the heart of its action. With the case still on adjudication, investors remain in the dark since the company is unable to present its financials whether unaudited or audited full-year, to inform any form of investment decision.
According to a statement from the oil firm, its inability to meet its 2020 third quarter (Q3) results NSE Filing of Accounts obligation by the stipulated due date was as a result of the indefinite suspension of the Company’s 2018 Annual General Meeting (AGM).
But shareholders who spoke to Daily Sun in separate telephone interviews, noted that they are watching with keen interest as to how the newly administration at the SEC would resolve a matter already made worse by an intricate web of court cases.
They, however, urged the Federal Government and the SEC to find ways of resolving the issue so as to improve the fortunes of its embattled shareholders.
Speaking to Daily Sun in separate telephone interviews, National Coordinator, Progressive Association of Nigeria (PSAN), Boniface Okezie, said the situation is bizarre and sends the wrong signal to foreign investors while adding the SEC needs to communicate with shareholders more and allow the oil company hold its AGM.
His words, “There must be a procedure of doing things in this country which I think the SEC is lacking in this situation. I am shocked that they had allowed this to go on for many years because we the shareholders and investors are suffering from SEC-Oando tussle. When the audit was carried out and the result was out, it was left for the SEC to communicate with the shareholders that this happened and then suggest a way to see how our monies can be recovered or even let the company have its AGM so that we the shareholders can decide that the CEO should step down but instead they acted on their own, of course, with the government having a hand in it as well.
This is entirely wrong because nowadays, the government interferes through the Ministry of Finance and so they (SEC) are not operating independently. People invest in a company to reap dividends, returns and capital appreciation and this is what we have not been seeing because the SEC has continued to drag this issue which has made investors lose confidence in the company and long term investments are being washed down the drain.
The government cannot pay us for what we should have gotten as a dividend over these years. The SEC should call shareholders and allow the company to hold its AGM and if a vote of no confidence is on the board, then the directors can go”.
Corroborating him, the President, Issuers and Investors ADR Initiative, Moses Igbrude, urged the current administration of SEC to find a way of resolving the situation using dialogue.
“I think that as a regulator, there are certain things you must do and for shareholders, we have been having issues as to how the oil firm is being run as there have been no dividend for long time after our buying of shares and the people are still there enjoying salaries while we the shareholders are being kept aside. The current DG as well as the Federal Government should find a way of going about it and we the shareholders/investors should be updated as to what is happening in that space,” he said.