Oando Saga: Operators want firm, holistic regulatory handling to protect investors

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

Capital market operators on Wednesday urged firm and holistic handling of the conflict between the Securities and Exchange Commission (SEC) and Oando PLC to protect investors’ interest in the Nigerian capital market.

The operators spoke in separate interviews with the News Agency of Nigeria (NAN) in Lagos on the publicised outcome of the forensic audit on Oando PLC.

Following the audit report published on May 31, SEC barred the Group Chief Executive Officer of Oando, Wale Tinubu, and his deputy, Omamofe Boyo, from holding becoming directors of public companies for five years.

Also, SEC imposed additional fine of N91.1 million on the two Oando’s top executive officials.

SEC, on June 2, announced the constitution of an interim management team for Oando Plc to be headed by Mutiu Sunmonu.

The new interim management was to oversee the affairs of Oando Plc and conduct an Extra Ordinary General Meeting (EGM) on or before July 1, to appoint new board of directors.

But, Justice Mojisola Olatoregun of the Federal High Court in Lagos in her ruling in an application brought before her by Oando restrained SEC from enforcing the decision against Messrs Tinubu and Boyo.

Justice Olatoregun ordered all parties to return to status quo.

Voices

The Chief Operating Officer, InvestData Limited, Ambrose Omordion, urged the federal government to intervene in the matter to safeguard investors’ confidence in the capital market.

Mr Omorodion said the international investment community was watching to see how the face-off between Oando and SEC would be handled.

“The way SEC and government will handle this issue will go a long way to determine the success of the nation’s drive for financial inclusion and attraction of new retail investors and foreign investors returning to the market,” Mr Omorodion said.

He urged the government to strengthen the commission to be firm in its handling of the crisis.

Mr Omorodion said he was disappointed that SEC had not only been operating without a board for about four years, but also with an acting director-general for over a year.

The Publicity Secretary, Independent Shareholders Association of Nigeria, Moses Igbrude, said shareholders suffered huge losses through their investments in Oando with no dividend and poor market pricing.

Mr Igbrude said the injunction restraining SEC from implementing the recommendations in the forensic audit report could lead to a protracted legal battles that could impact the company’s share prices on the Nigerian Stock Exchange (NSE).

He urged the exchange to place the share price of Oando on technical suspension to protect investors from further losses.

He said SEC should not allow its authority to be undermined if the outcome of the forensic audit was true.
“I will appeal to whoever is affected by the recommendations in the report to obey the directives from SEC for the sake of our investments in the capital market.

“Oando as a company has suffered enough of reputational risks. The shareholders have equally, for a long time, not been paid dividends,” Mr Igbrude said.

National Chairman, Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, likened the crisis between SEC and Oando to a “fight between two elephants where the grass always suffers.”

Mr Okezie said SEC and Oando must maintain the peace in the interest of all stakeholders, especially retail investors.

The PSAN boss said SEC, on its part, should also beam its searchlight on other oil companies quoted on the stock exchange.

The National President, Constance Shareholders Association of Nigeria, Shehu Mikail, said the Oando saga needed a holistic approach to restore confidence in the capital market.

“Oando saga is a big issue in the Nigerian capital market that needs a firm and holistic approach if really, we are going to adhere to the truth of corporate governance,” Mr Mikali said.

He said the action of SEC was in the right direction aimed at protecting the interest of Oando shareholders.

“Foreign investors are watching the drama and local shareholders and stakeholders are also awaiting to see how the matter will be resolved,” Mr Mikali added.

He said the outcome of the crisis will determine the direction the capital market will be heading in the near future.

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