Cross- section of shareholders of Oando Plc and capital market experts have lauded the speedy action taken by the Securities and Exchange Commission (SEC) by heeding to request for investigations into the happenings in the company’s management.
The shareholders, on Thursday, expressed that wrong doing will be exposed and adequate sanctions meted out by the culprits, adding that the Nigerian capital market regulator has maintained a zero tolerant stance to market infringement or unethical market practices.
SEC had, of Wednesday, 18th October, 2017, directed the Nigerian Stock Exchange (NSE) to suspend trading on Oando shares through placing it on technical suspension, pending conclusion of forensic investigation into allegations or unethical practices by the commission in its earlier enquiry.
One of the company’s shareholders, Chief Stephen Ozoloka, lauding SEC’s intervention, and said that the move by the commission has further strengthened the motivation for the capital market to thrive on zero tolerance for unethical market practices.
According to him, the prompt decision of the commission to halt trading in the shares of Oando, will guide against a possible run on the value of the shares of the company, which would have been detrimental to members of the company, shareholders, equity value and even future and credibility of the market as a whole.
The shareholders emphasized that SEC’s intervention has reawaken hope and confidence of investors in the market and the apex regulator.
“My hope is that the commission should be careful not to abuse its regulatory role. They should be firmed in taking whatever decision once they conclude with their findings”, he added.
National Coordinator Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, reacting to the development, said the decision would restore investors’ confidence in the capital market.
According to him, it’s imperative that SEC investigates and make its observations public without delay.
He said,“All the bottlenecks must be blocked. Thorough investigation is necessary. All decision must be made public.
It would be recalled that some shareholders of the company had said penultimate week that, “We have observed for three good years now that the financial operations of Oando Plc was of worrisome critical matters that affect our investment. No dividend was paid since 2013 financial year. Critical financial management concern on our investment areas follows:
“External auditors of Oando Plc reported strong doubtful going concern of the group annual financial statement. The group has negative working capital of over N263billion with current liabilities exceeding current assets.
The petition further stated that the management of Oando was unable to service its financial obligations. The group has accumulated losses of over N159 billion in its balance sheet as at 2016 year end, “ he said.
On his part, President of Renaissance Shareholders’ Association, Ambassador Olufemi Timothy alleged that the management of Oando is currently selling critical assets of the company.
He, therefore, called on SEC to do what is needful to restore investors’ confidence in the capital market.
“Management had been selling assets of the company, especially money-spinning assets, such as downstream (Marketing) businesses without meaningful improvement in debts situation. It is planning to sell its share in OER, which unfortunately is the last asset belonging to the company. We note that all actions were not enough to fully repay the outstanding debts. Management closed the year 2016 with consistent loss of over N768bn; significantly worse than the year-end 2015.
“The net loss for the year from continuing operations in 2016 amounts to N25.8billion as reported in the annual audited financial statement. We wish that you use your good offices, as a matter of urgency to save our investment in Oando Plc by looking into these matters, and cause an action to intervene in Oando Plc by removing the present management to allow for proper investigation of the corporate governance abuses and financial mismanagement as noticed in the published full year audited financial statement.
“We believe in the interest of fairness, justice and equity, the CEO, Mr. Wale Tinubu must vacate his seat to allow for proper investigation of all these allegations, corporate governance abuse and financial mismanagement. An independent new management must step in to save our investment in the interest of the integrity of the capital market and investor’s confidence, “he said.