Oando: Two weeks after public notice, SEC yet to commence forensic audit

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

Two weeks after the Securities and Exchange Commission, SEC, said it would begin forensic audit of Nigerian oil firm, Oando Plc, the audit is yet to start, PREMIUM TIMES has learnt.

In a statement issued on December 5, SEC notified Nigerians that the forensic audit of the company would begin the next day. But on Sunday, indications emerged that the regulator was yet to begin the audit.

A statement released on Sunday by Oando said the auditors are yet to approach the company to commence the audit. The development is coming against the backdrop of the suspension of the former Director-General of the commission, Mounir Gwarzo.

Mr. Gwarzo was suspended in November by the Minister of Finance, Kemi Adeosun, over allegations of financial malpractices.

A PREMIUM TIMES’ finding, however, revealed that the real reason for the suspension of the former DG was the Oando crisis. The report revealed that Mr. Gwarzo had refused requests to halt the forensic audit of the financial affairs of the embattled oil firm.

Mrs. Adeosun, however, denied she wanted the audit stopped, paving way for the acting SEC director general to insist on the audit in the December 5 statement.

Oando had been thrown into crisis following the technical suspension of its shares by the Nigerian Stock Exchange, NSE. The NSE said it acted on the directive of the SEC, which on its part said it received petitions from stakeholders of the company containing allegations of gross misconduct against the management.

Earlier, the company’s Annual General Meeting, AGM, had been disrupted in Uyo, Akwa-Ibom State, by some aggrieved shareholders who accused the Wale Tinubu-led management of malpractices in the running of the firm.

Following the suspension of its shares by NSE, the Johannesburg Stock Exchange also suspended Oando’s shares.

The SEC subsequently said it was going to conduct a forensic audit into the affairs of the oil company.

In a statement issued on Sunday, Oando not only said it was yet to be approached by any auditors sent by SEC, it also said it is opposed the proposed forensic audit in order to protect the company against actions taken by SEC under the leadership of Mr. Gwarzo.

The statement, signed by its Chief Compliance Officer, Ayotola Jagun, and the head of Corporate Communications, Alero Balogun, said there is no basis for the institution of a forensic audit of the company by SEC.

The company said it will go ahead with its legal battle against SEC on the alleged findings and sanctions following an investigation into the oil firm.

The company’s resolve to challenge SEC’s forensic audit had earlier hit a brick wall as a high court dismissed its application.

The statement, however, disclosed that the oil firm had gone to the Court of Appeal to challenge the ruling.

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The company said in addition to the legal action, it had written several petitions to the authorities expressing concern at the way SEC planned to embark on the audit.

Making reference to the leaked report of the technical committee that was set up by Mr. Gwarzo, the oil firm argued that the audit was premeditated and unfair.

“The SEC claims that the actions it has taken are based on specific ‘findings’ it has made against the company,” Oando said.

“Yet, in a totally self -contradictory manner, SEC wants to embark on a forensic audit of the company to confirm the veracity or otherwise of its findings. This begs the question as to how definite findings (in its own words) could have been made when SEC itself admits that its investigation has not been concluded.

“If it has made reliable findings, why then is there a need for further investigation in respect of the same petitions? The company believes that we have the right to a fair hearing before judgment can be made. We have been denied this right but instead have been judged guilty and penalised; now evidence is being sought to justify actions taken by the commission.

“Despite our objections to the forensic audit, the company would like to reiterate that we recognise and respect the authority of the commission, and in the spirit of cooperation, transparency and full disclosure, the company will comply with the directives of the commission while reserving our legal rights in this matter.”

The company also alleged that the penalties imposed on it by Mr. Gwarzo-led SEC outweighed the alleged infractions.

The oil firm acknowledged the appointment of Abdul Zubair as the acting director-general of SEC, saying it would provide opportunity “for a new and enduring relationship to be established.”

On Monday, PREMIUM TIMES’ efforts to get the reaction of SEC on the delay in commencing the forensic audit were unsuccessful. Repeated calls placed to the corporate communications desk of the regulator were not attended to.


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