In a notice dated today the 18th of October 2017, sent by the Nigerian Stock Exchange, dealing members (stock brokers) were instructed to place Oando Plc shares on full suspension for 48 hours.
- Effective for forty-eight (48) hours from today, 18 October 2017 to 20 October 2017, The Exchange should implement a full suspension in the trading of the shares of Oando Plc; and
- Effective from 20 October 2017 and until further directive, The Exchange should implement a technical suspension in the shares of Oando Plc.
A full suspension is the halt of trading activities in a listed security for a period. A technical suspension is the interruption of price movement in a listed security for a period so that any dealings in the securities which occur during the period of the suspension will not result in any change in price, which change may have occurred had the suspension not been implemented.
The NSE stated in the notice that it was acting on instructions from the Securites and Exchange Commission (SEC). SEC is the apex regulator of the Nigerian capital market.
Why SEC asked for the suspension
SEC hinged the suspension on the need to conduct a forensic audit of Oando Plc’s affairs and at the same time preserve the interests of shareholder ( market value of the shares).
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Why is SEC auditing Oando Plc ?
The Securities & Exchange Commission received two petitions from Alhaji Dahiru Barau Mangal and Ansbury Incorporated. The Commission carried out a comprehensive review of the petitions and discovered the following issues:
- Oando Plc had breached the Investment and Securities Act (ISA) 2007 and the SEC Code of Corporate Governance.
- There was also evidence of suspected insider dealing.
- Related party transactions not conducted at arm’s length.
- Discrepancies in the shareholding structure of Oando Plc. Etc.
The Commission notes that the above findings are weighty and therefore needs to be further investigated. After due consideration, the Commission believes that it is necessary to conduct a forensic audit into the affairs of Oando Plc. This is pursuant to the statutory duties of the Commission as provided in section 13(k), (n), (r) and (aa) of the ISA 2017.
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Who will conduct the audit ?
To ensure the independence and transparency of the exercise, the Forensic Audit shall be conducted by a consortium of experts made up of auditors, lawyers, stockbrokers and Registrars.
How the saga unfolded
In July 2017, Channels Televison a local news channel broke the news that the SEC was investigating Oando Plc, but later pulled down the story. After much prevarication, Oando finally revealed the parties behind the petition.
The shareholders Gabriel Volpi co founder of Intels Plc and Northern businessman Alhaji Dahiru Mangal accused the company’s management of financial recklessness, and denying them adequate representation on the board. They also requested that SEC suspend the company’s Annual General Meeting.
Oando Plc however denied the allegations, and stated that it was cooperating fully with the regulator. The company eventually held its Annual General Meeting (AGM) on the 11th of September where a vote of confidence was passed on the management lead by Chief Executive Officer Wale Tinubu.
The ensuing protests by shareholders led to the House of Representatives Capital Market Committee wading into the matter in July. SEC was given a two week deadline to conclude investigations into the company.