How Oando declared dividends from unrealised profits, released false financial statements — SEC

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

Nigerian 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 correspondence 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 Nigerian bourse 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.

But in a letter sent by SEC to the Group Chief Executive Officer of the firm, Wale Tinubu, and obtained exclusively by PREMIUM TIMES, 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.

It also revealed that the last audit of the firm was done by KPMG in 2012, a development it also said contravened the SEC regulations.

The letter also said that the firm paid dividends to its registrar in piecemeal, also a clear violation of the SEC regulations, even as independent auditors reported the going concern status of the company in 2016.

Further checks also revealed that certain persons classified as ‘insiders’ within the provision of section 315 of ISA, 2007, and were in possession of confidential price sensitive information not generally available to the public, had between January and October 2015 traded on Oando shares prior to the release of the company’s 2014 financial statement, in which the company reported a loss of N183 billion.

In 2013 and 2014, SEC revealed, Oando also declared dividends from unrealised profits even as certain Related Party Transactions were not conducted on arm’s length basis, all in violation of the SEC rules and regulations.

The commission said the findings were weighty and required further investigation by an independent team of auditors.

The regulatory body sais it had appointed a consortium of Akintola Williams Delloite, United Securities Limited, SPA Ajibade & Co, TJADAP Consulting and Associates, and Nasiru Muhammad and Co. to carry out the auditing.

“The cost implications of the exercises is N160,000,000.00 (One hundred and sixty million naira) and shall be borne by Oando Plc,” the letter stated.

Oando’s Head of Corporate Communications, Alero Balogun, declined comments, but said the company would issue a statement on the matter on Tuesday.


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  • dan arewa

    Yarabawa dama sune barayin Najeria, dukka bankuna mu su suka kashe.

    • Solomon Brown

      Tramslation: Yoruba’s are the theives of Nigeria, they have singlehandedly ruined our banks.

  • Intrepid

    FRAUD everywhere. The janjaweed ZOOLAND stinks.

  • forestgee

    Unbelievable, this is deep and serious.

    • Rafiu ebiti

      This report from sec is good.but why is the sec not prosecuting the insider dealers? The company oando cannot sue on behalf of sec

  • Dr Pat Kolawole Awosan

    How can any viable and transparent organisation like Oando,declares profit with the bottom line of such dividends unrealized profit by Oando just cooking-up fake data to proclaim economic prosperity.Just like former finance minister,Dr Ngozi Okonjo Iweala, declaration of Nigeria economy as the largest economy in Africa, without back-up GDP growth and recession-leaning economy in 2014 under Dr Goodluck Ebele Jonathan..

    • Harry

      Rubbish from you as always. Always reasoning with your anus. Why bring Okonjo Iweala into the case of Oando. Is she also in cahoot with Oando?

    • Rumournaire

      I don’t know what your doctorate is in, but basic economics would teach you that an individual cannot declare a country’s economy’s size. There is a standard international procedure for measuring the size of a country’s economy and, by that procedure, Nigeria’s economy turned out to be the biggest in Africa. It is not about GDP growth. Please, write like someone with a real doctorate!

      Oando’s case is a sad one. It reminds me of the story of the once giant energy company Enron in the US. That was a company led by people from the best Ivy League schools. But they were into declaring non-existent profits. They would declare a profit they hoped to make in ten years time, today! And they would pay themselves bonuses on it! Eventually, it became unsustainable and had to collapse.

      Oando’s undoing is that Adewale Tinubu moved the company into the upstream sector without proper guidance. He led the company to borrow money to acquire useless “oil blocks”. These were blocks that would noty deliver oil in the next ten years, but Oando had to keep paying interest on the loans. His adviser was a man who used to be a Training Manager in Schlumberger, who knew very little about the industry. ‘Wale Tinubu has been held hostage by that man, and the man has led him to make some really big blunders. The man heads OER – Oando’s upstream division. When there were still Canadians on the Board, they told Tinubu he had the wrong man leading him, but he would not listen.

      Now, perhaps the entire house will collapse! ‘Wale Tinubu would be lucky not to go to jail. He did some really unethical things. He “sold” his personal jet to the company and forced the company to pay, not only the price, but the maintenance cost – all of which the company could not afford. Meanwhile, he continued to use the jet as before.

      • FineBoy

        He is using Dr to deceive the people. He is actually empty like me

        • Rumournaire

          I appreciate your honesty. If one would pose as “Dr” he should at least be able to pretend to be one. But when you give yourself the title but reason like a motor park tout, you give the game away!

        • So oju abe niko

          Funny! You are definitely a person of substance. Otherwise, you won’t be comfortable to offer such a self-deprecating humor.

      • kaydutch

        He used to fly Toronto Canada to chase women as well. They posted him on a website here.

        • Rumournaire

          Actually, I don’t think the man had much time for women. Rather, he was consumed with an ambition to be seen as leading “the biggest integrated energy company in Africa”. He paid big bucks for bogus adverts on CNN even when the company was bleeding badly. Like them showing themselves (on CNN and in their website) as being in petroleum refining business when they never even had one on the drawing board.

          • Victor Olowogorioye

            Nobody is accusing him of being a womaniser. He is just a Corporate Fraudster using the Company to raise money from the public without adhering to good corporate practice.

          • Rumournaire

            Contributor @kaydutch had said Wale Tinubu used to fly his jet to meet women in Totonto Canada. I see he has removed that statement and just replaced it with “Sad”. It was his original post I responded to.

          • So oju abe niko

            Rumournaire and some of the other folks,
            Thanks for enlightening us with your very informed knowledge on this issue. And I applaud your honesty in defending Wale Tinubu on the accusation of womanizing, even as you offer a genuine criticism of his stewardship at Oando. How I wish most Nigerian commenters are like you, @victorolowogorioye:disqus and @Concern. If only pigs could fly…

      • Victor Olowogorioye

        Wale Tinubu is also a crook. Oando PLC problem did not emanate from the purchase of upstream assets. The Company has been falsifying financial report from the onset. The purchases of both AGIP and Unipetrol over a decade ago was fraudulently achieved and the frauds continued unabated. His attempt to use the high profit from upstream business backfired following the heavy crash in the price of crude oil after the ConocoPhilip deal, an opportunity which now allowed him to write off all the past and present frauds in 2014. Since then, he has embarked on massive sales of the Company’s businesses to repay loans. This is aside from the swindling of the Company through fraudulent Management Agreement payment via his Ocean and Oil Partners.

        • Rumournaire

          Believe me,although the ConocoPhilips deal was the last straw, Oando’s acquisition of useless assets from Shell (OPLs 278, 282 and 236) in 2006 was the beginning of the end for the company. Oando borrowed money ostensibly to procure petroleum, products for marketing, but used it to acquire these useless but grossly over-priced assets! From that point on, Oando began to struggle as the interests on the borrowed funds was killing it.

      • Concern

        The Oando boys Wale Tinubu and Mofe Boyo are dealers without any corporate integrity they had no business managing a corporate organisation. They used well respected influential Nigerians to acquire (Unipetrol Nigeria Plc) a company they lacked the capacity to manage. They were trading with Ocean & Oil Trading a company controlled by Wale Tinubu and Mofe Boyo to milk Oando Plc. The company served as the middleman making all the profit while Oando Plc recorded losses. SEC can not wash itself clean from this major fraud committed by the top executives of Oando Plc, no investor should be made to suffer the irresponsible actions of top executives of Oando Plc. Therefore, their fraudulently acquired investments spread around the world should seized and sold to compensate investors who are likely to lose their life savings.

        • Rumournaire

          I definitely agree with every point you made. There are people who fraudulently acquire a business, but still manage the business successfully. Having acquired Unipetrol – and later Agip Marketing, ‘Wale (especially) was brimming with ambition and staked the company’s assets for upstream assets he knew nothing about.

          The way they used Ocean and Oil to milk Oando Plc was most amazing. The Technical Service Agreement they entered into with Oando shareholders was such that Ocean and Oil could be making tonnes of money while Oando Plc declared a loss. It took repeated strong protests from shareholders for that Agreement to be terminated around 2011. And, when it was terminated, it cost Oando Plc shareholders about N5b because Ocean and Oil who crafted it made it very expensive to terminate. When that Agreement was terminated, the then CEO of Ocean and Oil lobbied ‘Wale to be made CEO of Oando Exploration and Production Limited. ‘Wale kicked out a very seasoned upstream ex-Shell professional who was then CEO of OEPL, to give way to the ex-CEO of Ocean and Oil!

          I would have no sympathy for them if ‘Wale and ‘Mofe go to jail.

    • Segun Adeleke

      Fake PH.D holder. Always commenting unintelligently.

  • Kelly

    Tinubu’s and fraud!!!

    They guy used Oando’s money to join in sponsoring Buhari’s campaign, flying Mrs. Aisha in his private jet thinking he will be made the GMD of NNPC, but he don’t know that the Fulani’s does not make friend with that kind thing.

  • Victor Olowogorioye

    Oando PLC is a Company run by Corporate Fraudsters with the Regulatory Authorities looking the other way while the fraudsters continued to falsify financial records to defraud shareholders and investors. I am just wondering how this post mortem audit coming after over a decade of frauds perpetrated by the Board and Management of Oando PLC with active connivance of its external auditors will save the investments of the shareholders who will also bear the bogus forensic audit fees of N160m.
    While Oando goes through the process of forensic audit, the regulatory authorities including SEC and NSE as well as the External Auditors should also have their activities subjected to same forensic audit.