Following the suspension of Oando Plc from the floor of the Nigerian Stock Exchange, YNaija has obtained a copy of the letter that led to the suspension.
The letter dated October 17, 2017 and addressed to the Group Chief Executive Officer, Oando Plc, Adewale Tinubu pointed out the findings of the commission.
It also concluded that a consortium of experts audit the company to ascertain the veracity of the commission’s findings.
SHAREHOLDERS PROTEST AT THE NATIONAL ASSEMBLY
Shareholders of the Oil and Gas company had held a mass protest in Asokoro area calling on regulators to protect their interest and save Oando from collapse.
The protesters alleged breach of corporate governance in Oando and called for the resignation of Wale Tinubu, the Group Chief Executive Officer.
THE SECURITIES AND EXCHANGE COMMISSION (SEC) SUSPENSION ORDER
The Securities and Exchange Commission (SEC) had on October 20, ordered the Nigerian Stock Exchange to implement a technical suspension of the shares of the company.
SEC stated that it carried out a comprehensive review of the petitions – from Dahiru Mangal and Ansbury Incorporated – and discovered issues of breach of the provisions of the Investments & Securities Act 2007, breach of the SEC Code of Corporate Governance for Public Companies, suspected insider dealing, related party transactions not conducted at arm’s length, discrepancies in the shareholding structure of Oando Plc.
However, on October 23, the Nigerian Stock Exchange (NSE) partially lifted the suspension placed on shares belonging to Oando Plc.
Tinuade Awe, General Counsel, Head of Regulation, NSE said shareholders can now trade their shares but there will be no price movement.
“Please be informed that effective today, Monday, October 23, 2017; the shares of Oando Plc have been placed on technical suspension. Thus, the shares will be available for trading but there will be no price movement while the technical suspension subsists,” he said in a statement.
THE PETITIONS THAT LED TO THE SUSPENSION
The Securities and Exchange Commission (SEC) had received a petition from Ansbury Inc. and Alhaji Dahiru Mangal who are both shareholders of Oando Nigeria Plc.
They alleged that there were cases of gross abuse of corporate governance and financial management in Oando PLC.
However, the management of Oando responded that Ansbury was not a shareholder and Alhaji Mangal did not have the percentage of shares he claims to possess in the company.
In the letter from SEC dated October 17, 2017, the commission said Alhaji Mangal is a shareholder. It added that Ansbury is not a shareholder of Oando Plc but a shareholder in OODP BVI, which owns 99.9% shares in OODP NIgeria, a majority shareholder in Oando Plc.
To that extent, the commission recognises the two petitioners as whistle-blowers.
THE COMMISSION’S FINDINGS
The commission said Oando Plc violated the SEC Code of Corporate Governance by making the Group Chief Executive Officer responsible for fixing the remuneration of other Executive Directors. It added that the last board evaluation of Oando Plc was done by KPMG in 2012, a violation of the part B, 15.1 of the SEC Code of Corporate Governance.
The Securities and Exchange Commission also said “the disposal of Oando Exploration Production Limited (OEPL) to Green Park Management Limited was done without prior approval of the commission.”
It noted that the report of independent auditors of Oando Plc, Ernst & Young showed the going concern status of the company.
The commission observed that certain insiders in possession of confidential price sensitive information had between January to October 2015, traded Oando Plc shares, prior to the release of the company’s 2014 financial statement where it reported a loss of N183 billion. It added that the company also declared dividends in 2013 and 2014 from unrealised profits.
SEC’S SUBMISSION
In the letter written by its head, Legal department, Braimoh Anastasia, SEC concluded that the findings are weighty and must be further investigated. The commission selected a consortium of experts to audit the company in order to ascertain the extent of the breaches. The cost of this audit is N160 million, which is to be borne by Oando Nigeria Plc.
The consortium includes Akintola Williams Deloitte; United Securities Limited; SPA Ajibade and Co; TJADAP Consulting and Associates; and Nasiru Muhammad & Co.
