SEC orders full suspension of trading in Oando’s shares

*Discovers gross misconduct, insider dealings, others
Afolabi Adesola

Nigeria’s Securities and Exchange Commission (SEC) has ordered the Nigerian Stock Exchange (NSE) to immediately suspend the trading, in the shares of Oando Plc.

The suspension order, which became effective on Wednesday, October 18th, 2017, is as a result of what the capital market regulator said, was ‘gross misconduct and insider dealings’ discovered by SEC to necessitate further investigations.

The Daily Times recalls that SEC had received two petitions from Alhaji Dahiru Barau Mangal and Ansbury Incorporated early in September, requesting that Oando’s 40th AGM be placed on hold.

Although the AGM was held, there was a short protest at the venue attempting to stop the oil firm from holding the meeting.

The firm had that time confirmed the disruption; and noted that the protest was carried out by those believed to be shareholders of the oil and gas firm.

SEC, in a public notice issued on Wednesday, however, noted that it had conducted a comprehensive review of the petitions’ and would carry out a forensic audit into the affairs of Oando Plc. following the weighty findings that arose from several petitions against the energy company.

According to SEC, some of the findings made following the preliminary investigation and a comprehensive review of the petition were amongst 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, Discrepancies in the shareholding structure of Oando Plc’. etc.

“The Commission’s primary role as apex regulator of the Nigerian Capital Market is to regulate the market and protect the investing public. The Commission notes that the above findings are weighty and therefore need to be further investigated.” The notice from SEC read

The apex regulator further noted that, “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.”

It said the Forensic Audit shall be conducted by a consortium of experts made up of auditors, lawyers, stockbrokers and Registrars, to ensure the independence and transparency of the exercise.

To further ensure that the interest of all shareholders of Oando Plc is preserved during the course of the exercise, the Commission thus directed the Nigerian Stock Exchange to place the shares of Oando Plc on technical suspension effective for forty-eight (48) hours from today, (yesterday) 18 October, 2017, to 20 October 2017.

“The Nigerian Stock Exchange should implement a full suspension in the trading of the shares of Oando Plc; and Effective from 20 October 2017; and until further directive, The Exchange should implement a technical suspension in the shares of Oando Plc.” the statement read.

A full suspension is the halt of trading activities in a listed security for a period. A technical suspension is the interruption of price movement in a listed security for a period so that any dealings in the securities which occur during the period of the suspension, will not result in any change in price, which change may have occurred had the suspension not been implemented.

“In the 48 hour period commencing today (Wednesday), there will be no trading in the shares of Oando Plc. Thereafter, effective 20 October 2017, investors will be able to trade in Oando Plc’s shares, but such trading will not result in any movement in the price of the shares.” General Counsel/Head of Regulation at the NSE, Tinuade Awe confirmed.