TheNewsGuru

Tag: Oando

  • Shares suspension: SEC’s directives illegal, aimed at ruining our business – Oando

    Oando Plc has condemned the decision of the Securities and Exchange Commission (SEC) to fully suspend trading on its shares on the floor of the Nigeria Stock Exchange, NSE.

    The company described the action as illegal, invalid and calculated to ‘prejudice’ its business.

    TheNewsGuru.com reports that SEC, on October 18, 2017 suspended trading in the shares of Oando and ordered a forensic audit into the affairs of the company following allegations of infractions filed against the firm by Ansbury Inc. and Alhaji Dahiru Mangal.

    In two separate statements issued on Tuesday, Oando said: “We are of the view that the SEC’s directives are illegal, invalid and calculated to prejudice the business of the company. The company, being dissatisfied with the most recent actions taken by the SEC and to safeguard the interests of the company and its shareholders, immediately took steps to file an action with the Federal High Court (FHC) against the SEC and the Nigerian Stock Exchange (NSE).”

    Oando obtained a court order to halt the suspension of trading in its shares and a forensic audit planned by SEC.

    Confirming the development, Ayotola Jagun, Chief Compliance Officer and Company Secretary, in a statement, said: “ The NSE and SEC were served with the enrolled court order today Tuesday, October 24, 2017 after the technical suspension was carried out by the NSE on Monday, October 23, 2017. “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 oil firm also expressed disagreement with SEC’s pronouncements on the suspension of trading in its shares and the forensic audit, noting that none of the allegations of infractions levelled by the regulator against the company warrants a forensic audit on the institution’s affair or full or technical suspension of trading in the company’s shares on the NSE.

    Oando maintained that the SEC has not presented a strong case to support the engagement of a forensic auditor to audit the affairs of the company.

    Stating reasons for the disapproval, Oando said the SEC requesting a forensic audit in order to investigate whether its findings are true is a clear contradiction from the norm.

    “How did the SEC arrive at its findings if it cannot be sure of the veracity of those findings, and more importantly how did it ascribe the appropriate level of weight to be given to those findings, enough to warrant an immediate suspension followed by a technical suspension of the shares of the company, especially if those findings are still mere allegations at this point, as the commission has clearly communicated? ” the company asked.

    Oando stated clearly that the commission, in a letter, informed the company informed Oando that the N160 million cost of the forensic audit will be borne by the Company, to which Oando responded by saying that this must be an error in light of all its submissions to date, and not the best use of shareholder funds at this time.

    The company noted that in the letter sent by the SEC, both petitioners, Alhaji Mangal and Ansbury Inc, were copied, lamented that it is unheard of and prejudicial for petitioners to be copied on correspondence to the investigated party on findings yet to be concluded.

    “It is unclear how the SEC will respond to the allegations against it on the basis of bias, but one thing is evident from the press statement issued by the company, Oando has taken a different and bold stance to challenge the commission.”

    According to the statement, the oil firm on Monday, October 23, 2017 obtained an ex-parte order from the FHC granting an interim injunction, through an order restraining the NSE from effecting the directive of the SEC to implement a technical suspension of the shares of the company, and an order restraining the SEC from conducting any forensic audit into the company’s affairs pending the hearing and determination of the matter.

    “An Oando source advised that the company’s reasons for taking this stance against the commission is the clear bias that has been shown towards the petitioners and the mismanagement of the investigation from inception.

    “Firstly, there is a fact that the SEC’s investigation of a public-traded company is public knowledge; a fact that has had a negative impact on the company’s share and enterprise value, and led to some of the company’s shareholders questioning who the SEC is really protecting. The source went on to say that there have been four media leaks till date, with sources indicating that the leaks have emanated from the SEC.”

    Oando also raised questions as to why the commission investigated a petition brought by an indirect shareholder (Ansbury Inc.) domiciled outside Nigeria, in a jurisdiction outside the SEC’s purview and one currently in arbitration court in the UK, when the commission’s complaints management framework says it shall not consider any matter which is currently in arbitration.

    In a recent letter to Oando, the SEC re-categorised the petitioner as a “whistle blower”, contrary to its former position as a “shareholder”, which according to Oando, shows a clear bias as it suggests the commission re-categorised the petitioner’s position to ensure it is able to carry on investigating the petitions.

    The oil company explained that in its statement, it highlights letters sent by its chairman, Oba M. A. Gbadebo, to the Director General of the SEC, Mounir Gwarzo, alleging bias and lack of due process in the way and manner in which the SEC has conducted the investigation.

  • ‘OANDO declared unrealised dividend, released false financial statements…’ SEC documents shows

    Oil firm, Oando Plc, allegedly declared dividends from unrealised profits and released false financial statements to the public before it was suspended by the Nigerian Stock Exchange, NSE, a letter sent to the oil firm by the Securities and Exchange Commission, SEC, shows.

    Oando, which was suspended by the NSE on October 19, has been enmeshed in a protracted crisis for a while.

    The NSE suspension followed an October 18 directive by the SEC, mandating the it to sanction the oil firm.

    Similarly, the Johannesburg Stock Exchange, following an advice from the Nigerian bourse, also suspended the embattled firm on October 19.

    However, in a letter sent by SEC to the Group Chief Executive Officer of the firm, Wale Tinubu, and obtained by TheNewsGuru.com, the commission said it found that the oil firm’s 2014 Rights Issue Circular ”contained misleading information.”

    The letter, dated October 17, and signed by Braimoh Anastasia, Head of Legal department at SEC, said the oil company’s disposal of Oando Exploration Production Limited, OEPL, to Green Park Management Limited was done in contravention of the Investment and Securities Act, ISA, 2007 because the regulatory body was not informed.

    In 2013, following the structuring of the OEPL transaction in a way SEC said contravened the ISA 2007, Oando recorded a profit of about N6 billion that erased a loss of N4.68 billion which made the company declare a profit of N1.4 billion for the same financial year.

    The letter revealed that since the transaction was done in contravention of ISA 2007, Oando Plc restated its 2013 and 2014 audited accounts which contained “…material false and misleading information contrary to section 60(2) of the ISA 2007.”

    The letter also revealed that the 2014 Rights Issue Circular of the company contained information on the profit reported by the company in 2013 arising from the sale of the OEPL, which the commission considered “false and misleading.”

    This action, it said, amounted to a violation as contained in sections 85, 86 and 87 of the ISA 2007.

    In the notice publicly released by SEC on October 18, the regulatory commission said it received petitions from a shareholder, Dahiru Mangal, and Ansbury Incorporated, with allegations of gross misconduct leveled against Oando’s management.

    The commission said it regarded Ansbury as a whistleblower.

    Similarly, the commission noted that the corporate governance return submitted by the company in December 2016 showed that the renumeration of the GCEO, Mr. Tinubu, and the deputy GCEO were approved by the board while the GCEO approved the renumeration of other executive directors, a clear violation of part B 14.3 of the SEC Corporate Governance Code.

    Meanwhile, the ongoing crisis in Oando has attracted the company’s boss, Wale Tinubu heavy backlash on the social Media .

     

     

     

  • SEC suspends sale of Oando shares

    Sequel to alleged discrepancies in its operations and investigation of petitions by shareholders, the Securities and Exchange Commission, SEC, on Wednesday ordered full suspension of the trading of shares of Oando Plc for two days.

    The commission also directed that effective from Friday, October 20, the Nigerian Stock Exchange should implement a technical suspension of the shares of the company.

    SEC in a notice posted on its website on Wednesday morning said it took the decision after it received two petitions from Dahiru Mangal and Ansbury Incorporated.

    The Commission explained that it carried out a comprehensive review of the petitions and discovered issues of 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. Among other discrepancies.

    “The Commission’s primary role as apex regulator of the Nigerian Capital Market is to regulate the market and protect the investing public,” it said.

    “The Commission notes 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.”

    According to SEC, to ensure the independence and transparency of the audit 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 to place the shares of Oando Plc on technical suspension,” it said.

    The commission, however, noted that in view of the fact that it is not technologically feasible for the Exchange to effect a technical suspension except after 48 hours, it has directed the Nigerian Stock Exchange to implement a full suspension in the trading of the shares of Oando Plc, effective for 48 hours from Wednesday to Friday 20.

     

    Details later…