By Chinenye Anuforo
The Securities and Exchange Commission (SEC) has ordered the Nigerian Stock Exchange (NSE) to halt trading in the shares of Oando Plc henceforth.
A statement from the Commission said it took the decision based on several complaints from shareholders against Oando Plc.
SEC explained that it received petitions from one Alhaji Dahiru Barau Mangal and Ansbury Incorporated after which it then carried out a comprehensive review of the petitions and made the following findings among others;
Breach of the provisions of the Investments & Securities Act 2007; breach of the SEC code of corporate governance for public companies; suspected insider dealing; related party transactions not conducted at arm’s length and discrepancies in the shareholding structure of Oando Plc.
It adds: “The Commission’s primary role as apex regulator of the Nigerian capital market is to regulate the market and protect the investing public. And so, the Commission noted that the above findings are weighty and, therefore, needs to be further investigated.
“After due consideration, the Commission believes that it is necessary to conduct a forensic audit into the affairs of Oando Plc. This is pursuant to the statutory duties of the Commission as provided in section 13(k), (n), (r) and (aa) of the ISA 2017.
“To ensure the independence and transparency of the exercise, the Forensic Audit shall be conducted by a consortium of experts made up of auditors, lawyers, stockbrokers and Registrars.
“To further ensure that the interest of all shareholders of Oando Plc are preserved during the course of the exercise, the Commission directed the Nigerian Stock Exchange (NSE) to place the shares of Oando Plc on technical suspension.
“However, in view of the fact that it is not technologically feasible for the Exchange to effect a technical suspension except after 48 hours, the Commission directed as follows: Effective for 48 hours from today, October 18 to October 20, (2017), the Nigerian Stock Exchange should implement a full suspension in the trading of the shares of Oando Plc; and effective from October 20, 2017 and until further directive, The Exchange should implement a technical suspension in the shares of Oando Plc.
Recently, some shareholders had stormed Oando AGM with placards demanding the resignation of its Group CEO, Mr. Wale Tinubu.
The protesters whose aim was to stop the AGM from holding accused the company’s boss of mismanagement and lack of full disclosure.
According to the leader of Oando Shareholders Solidarity Group”, Mr. Francis Michael, they were protesting so as to change the management of the company over gross mismanagement and abuse of corporate governance.”
According to him, they have read several reports on the gross mismanagement of Oando by its present management.
“We therefore, call on the present CEO of Oando to step down and allow a competent hand to manage the company to save millions of Nigerians from further loss of their hard earned money. We are also call on the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) to commence immediate investigation to determine the true state of its financial position and corporate practice. We also demand the rejection of proposal concerning the remuneration of the CEO and directors of Oando Plc and rejection of 2016 annual report and accounts and the need to convene an Extra-ordinary General Meeting within the shortest possible time to address the issue of current mismanagement and abuse of corporate governance of the company,” he said.
Also recently, the House of Representatives Committee on Capital Market and other Institutions gave the SEC and Oando two weeks to resolve all issues regarding the alleged N799 billion stakeholders’ liabilities with the oil firm.
At the House committee meeting where officials of the two organisations, along with some aggrieved shareholders of the oil company met, the committee members led by its deputy chairman, Tony Nwulu, lamented incessant losses of Oando plc shareholding value, which they said currently stood at N159 billion.
They said the committee would be compelled to conduct an open investigative public hearing if the commission failed to agree with the oil firm and the shareholders, to allow for ”more inclusive inputs into the way forward.”
Meanwhile, shareholders have commended the decision of SEC to place shares of Oando on technical suspension, saying it was pre-emptive.
Specifically, Mr. Boniface Okezie of National Coordinator, Progressive Shareholders Association of Nigeria, (PSAN) commended the Commission on its decision to stop temporarily trading on the shares of Oando.
He said the decision was proactive measure as it is in the interest of the shareholders.
His words: “SEC decision is very commendable. Shareholders have lost of N20 billion since this scandal started. With this decision, investors investments and value are protected”.
Okezie also stated that the decision of the SEC to invite forensic auditors will also make all parties to take the outcome of the investigation wholeheartedly knowing that the Commission did not take side with any party.
Another shareholder activist, Bayo Adeleke also said that the SEC decision on Oando is timely and in interest of the shareholders.
He said, “It is a pre-emptive step by the capital market apex regulator to avoid erosion of value of investors’ investments. SEC has done what is expected of them because if not, some investors on hearing of its invitation of forensic auditors will start dumping the shares of the company which effect would be negative”