UPDATED: Finally, SEC ready to begin Oando audit

Nigerian oil company, Oando. [Photo credit: Guardian Newspaper]
Nigerian oil company, Oando. [Photo credit: Guardian Newspaper]

Months after the Securities and Exchange Commission notified Nigerians of an impending forensic audit into the affairs of Oando PLC, the capital market regulator said on Tuesday it was finally set to commence the exercise.

The acting Director General of the Commission, Abdul Zubair, said the decision to commence the audit exercise followed the vacation of the two lawsuits that stalled the exercise.

Notice about the audit was given by Mr. Zubair on December 5, 2017 following petitions from some shareholders accusing the management of the company of gross misconduct.

Following the petitions by Dahiru Mangal and Andsbury Plc, the regulatory authorities had, apart suspension of the shares of the company on the Nigerian Stock Exchange, ordered a forensic audit into its operations.

However, following the suspension from office last November of the former director general of the Commission, Mounir Gwarzo, by the Finance Minister, Kemi Adeosun, the audit exercise was stopped.

Although official reason given for his suspension was based on allegations of official misconduct and financial malpractices, Mr. Gwarzo said his suspension was rooted in his refusal to buckle to pressure from the Finance Ministry to abort the audit.

However, SEC had insisted that the delay to commence the audit had nothing to do alleged plot by the Finance Ministry to abort the process due to some vested interest.

Rather, the Commission said the delay was due to two law suits filed by Oando and some shareholders to stop SEC and the NSE from effecting the technical suspension on its shares and appoint the firm to conduct the forensic audit.

In January, one of the petitioners, Dahiru Mangal, withdrew his petition allegedly following a peace deal with the oil firm’s chief executive officer, Wale Tinubu.

Mr. Mangal’s decision had further cast serious doubt about the prospect of the proposed forensic audit from going forward.

However, Mr. Zubair said on Tuesday the two lawsuits by Oando PLC and some of its shareholders have finally been vacated.

Mr. Zubair said the withdrawal of the suits followed an application heard and granted by the Court of Appeal on March 5, 2018.

On February 21, 2018, some aggrieved shareholders of the company also withdrew ta similar application after the Federal High Court heard and granted and application by the Commission.

“Following the dismissal and striking out of the suits, the SEC has duly informed the firm of Deloitte to proceed with the forensic audit,” Mr. Zubair said in statement.

The acting DG said the SEC had conducted a preliminary investigation of allegations against Oando based on the petitions and based on some findings “took steps to preserve shareholders value and protect the investing public.”

Apart from placing the shares of the indigenous oil and gas company on technical suspension, he said the decision by the Commission to order the forensic audit was to get to the root of the allegations.

He restated the Commission’s commitment to uphold its primary mandate of protecting investors by taking all necessary steps to uphold the integrity of the capital market.

Although Mr. Zubair said the audit would proceed immediately “in a transparent and thorough manner,” he did not however give the exact duration the audit would last.

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