Oando Vs SEC: Oil firm flaunts court order to annul suspension, forensic audit

* Scandal, setback for economy Stakeholder

Adesola Afolabi, Lagos

The latest development in the Oando/SEC capital market drama that unfolded in September has taken a new twist as Oando announced that it has obtained a court order to annul the suspension placed on the sale of its shares by the Nigerian Stock Exchange (NSE) following directives from the Securities and Exchange Commission (SEC).

Nigeria’s SEC had on Wednesday, October 18, 2017, ordered the NSE to immediately suspend the trading in the shares of Oando Plc for 48 hours, followed by a technical suspension until further directed.

The SEC had also announced a forensic audit into the affairs of the company be conducted by a team of independent professional firms as a result of gross misconduct and insider dealings discovered by SEC to necessitate further investigations.

The resultant effect was a trade suspension of Oando’s shares at the Johannesburg Stock Exchange.

But in a bid to fight back, Oando Plc served the NSE and the SEC a Federal High Court (FHC) order on Tuesday, October 24, 2017 restraining the NSE and any other party working on their behalf from giving effect to the directive of the SEC to implement a technical suspension of the shares of the company, pending the determination of the motion for injunction.

Oando also got an order restraining the SEC and any other parties claiming through or working on behalf of the Commission from conducting any forensic audit into the affairs of the company pending the determination of the motion for an injunction.

Oando revealed this in a statement signed by its Chief Compliance Officer & Company Secretary, Ayotola Jagun and the Head, Corporate Communications, Alero Balogun, published on its official website on October 24 titled “Oando Plc’s Official Statement on the Securities and Exchange Commission’s Alleged Findings following their Investigation of the Company and their Penalties / Implications”

The statement noted that “Oando is of the view that the SEC’s directives are illegal, invalid and calculated to prejudice the business of the Company, adding that, the court order was obtained to safeguard the interests of the Company and its shareholders.

“In our view, both the NSE and the SEC are legally obliged to comply with the interim orders pending the substantive determination of the suit,” the statement partly read.

Meanwhile, Managing Director and Chief Executive Office of Enterprise Stockbrokers Plc, and a stakeholder in Nigeria’s capital market, Mr Rotimi Fakayejo, has said the issue is a great setback for the Nigerian economy and not just the capital market alone.

Speaking with our correspondent in Lagos, Fakayejo said “If Nigeria’s Investment Promotion Council is actually doing its work, this issue with Oando is undoing whatever they are doing”.

The Nigerian Investment Promotion Council is an organization that promotes investment in Nigeria outside the country. “But with this kind of development, very few investors will want to invest in Nigeria,” he said.

According to Fakayejo, the issue is not a SEC matter alone, but a big challenge for the Nigerian government. He said, “The auditing firm had flagged the oil company’s account in the last two financial years, I believe this is when the SEC should have set in”.

Addressing the way forward, the capital market expert said, “The first thing SEC ought to do is to sack the board. He, however, lamented the irregularities with Nigerian Law, saying that the law has a way of circumventing what is obvious.

He, advised the SEC to look at the interest of the employee, the community the oil firm services, the majority shareholders and minority shareholders as well.

The latest update from SEC on the issue came on Monday, announcing that the shares of the company are no longer on full suspension but on technical suspension. The SEC also said it had concluded arrangements for the commencement of the investigation exercise and wishes to reiterate its unwavering commitment to protect all investors in the company and the integrity of the Nigerian capital market.

The imbroglio began when two major shareholders of the company, Dahiru Mangal and Ansbury Inc, submitted a petition to SEC demanding the postponement of the company’s annual general meeting and accused the management of gross abuse of corporate governance and financial mismanagement.