The House of Representatives Committee on Capital Market and other Institutions on Tuesday gave the Securities and Exchange Commission, SEC and Oando Plc 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.”
President, Rennaisance Stakeholders Association of Nigeria Incorporated, Olufemi Timothy, who led the angry shareholders to the National Assembly, to hand in a six-page petition to the committee said he had led some shareholders to the parliament to inform it of their plight.
He was accompanied by a leader of another shareholders’ group, Akinolu Oderinde, who is the National Coordinator of Proactive Shareholders of Nigeria.
Mr. Timothy accused the regulators including SEC and Financial Reporting Council of Nigeria, FRCN, of being complacent in the discharge of their constitutional mandates, and called for an independent probe of the accounts of the company.
He alleged that the company has not been paying dividends to the shareholders since 2013 financial year, adding that the “external auditor’s report reported ‘strong doubtful going concern’ over the Group’s annual financial statement.”
According to the petition, “the Group has negative working capital of over N263 billion consequence of current liabilities above, lighter than current assets, meaning that the management was unable to service its obligations financially.
“Claim of creditors is higher than the owners, shareholders equity, meaning that the group could be liquidated by the creditors anytime if urgent action is not taken.
“With accumulated losses of over N159 billion, shareholders could not get a dime as cash dividend. No hope of redeeming these reserved losses.
“Court cases as projected by the management may take claims of over N608 billion which is far greater the assets of the entire group, meaning that the group is at a very high risk of liquidation if the court cases against the company succeed.
“Cost of litigation is very high. Litigation has a damaging consequence on our company’s reputational risk under the current management. Management was increasing entitlements, remunerations despite lack of working capital.
“Both current liabilities and long-term liabilities stood at over N799 billion. Management was selling assets of the company, especially money-spinning assets such as downstream (Marketing) business without meaningful improvement in debts situation. It was planning to sell its share in OER which unfortunately is the last asset belonging to the company.”
The petitioners also urged the leadership of the House to “as a matter of urgency save their investment in Oando Plc, look into these matters, cause an action to intervene in Oando plc by ordering/remove the present management, to vacate office, allowing for proper investigation of the corporate governance abuses, financial mismanagement as noticed in the published full-year audited financially statement.”
In handing down the resolution, Mr. Nwulu assured that the committee would not relent in ensuring a peaceful resolution of all disagreements involving the complicity of SEC in the alleged shareholders’ losses.