Oando Plc share price fell by a whopping 9.5% on Monday despite a court order restraining the Securities and Exchange Commission from sacking its board. The stock has now lost 18.2% since Friday.
Oando Plc‘s share price fell to N3.80 kobo yesterday, despite obtaining Federal High Court injunction preventing SEC‘s interim management from taking over the company This drop made it one of the top losers, yesterday, as Nairametrics reported.
Federal High Court of Lagos Grants Oando PLC’s Group Chief Executive and Deputy Group Chief Executive an Injunction Restraining the Securities & Exchange Commission from Executing Sanctions. Follow the link to read more https://t.co/YqgEQxMeYB pic.twitter.com/CQQ7IuBHwv
— Oando PLC (@Oando_PLC) June 3, 2019
The Court’s Decision
- Restrained the Securities and Exchange Commission (SEC) from removing embattled Wale Tinubu and Omamofe Boyo as Oando Plc’s Group Chief Executive Officer and Deputy Group Chief Executive Officer, respectively.
- Restraining Mutiu Olaniyi Adio Sunmonu from acting as the head of the Interim
Management of Oando Plc.
- An order staying and/or suspending the execution or the enforcement of the SEC’s
decisions contained in its letter dated 31st May 2019 imposing a fine of N91,125,000 on
Jubril Adewale Tinubu and barring both Jubril Adewale Tinubu and Omamofe Boyo from
being Directors of public companies for a period of 5 years.
- Restraining the SEC, its servants and its agents from directing, requesting any Agency
of the Government from acting upon the SEC’s decisions contained in its letter dated 31st May 2019.
What this means: The court order is a big win for Oando Plc‘s management, albeit temporary. Despite this, investors are still worried that things could get worse and appear to rather dump the stock and watch as things pan out. Taking on a regulator as huge as SEC can be daunting and frustrating for the operations of any business. Important to note that all Oando got was a court order and not a judgment. SEC could also obtain another court order countering Oando’s.
Why this matters: Nairametrics had previously reported that the tussle between SEC and Oando would find its way to the court as had been experienced in the past. We also reported that the court’s judgment is expected to calm investors confidence. However, if the stock could fall despite a court win for Oando, then it’s most likely that it will keep on depreciating even as the tussle drags on.