It was Monday morning and the crack team at Oando, hurriedly assembled together to strategize on a striking and measured response to the Security and Exchange Commission’s “SEC” hammer that fell on the company on Friday, was taking its toll.
Over the gruesomely long weekend that followed the press release, the team made up of staff from legal, compliance, investor relations, finance and corporate communications had huddled together in their Wings Head Office Building, brainstorming about how exactly to respond to the SEC directive. Some barely had 2 to 3-hour sleep and only had to settle on fast food and beverages to keep body and soul together. This was the start of a long drawn battle, which expectedly, they hoped to win.
Different ideas rang around the room ranging from challenging it legally to controlling the narratives in social media, electronic and print media, to managing shareholder expectation, investor relations, and even government’s watchful eyes.
Hundreds of phone calls were made over the seemingly long weekend from members of this team, their media handlers as well as top management. They called everyone they thought could shape, influence and control the narrative of the matter while they prepared a legal response.
The stakes were high and understandably so. How they respond to the stark allegations from SEC is critical to winning the argument in the court of judges and lawyers as well as the court of public opinion.
By the end of the weekend, the public had read about two press releases responding to the allegations against Oando.
- The first was issued Friday evening with Oando vehemently stating that the “alleged infractions and penalties are unsubstantiated, ultra vires, invalid and calculated to prejudice the business of the Company.”
- The letter published on the website of the Nigerian Stock Exchange also contained what appeared to be its next line of action. “The Company reserves its rights to take all legal steps to protect its business and assets whilst remaining committed to act in the best interests of all its shareholders.”
- The second letter written in Oando’s letterhead was a response to a letter from SEC addressed to the Chairman of Oando.
- This 6-page second letter was more detailed and took a combative tone when compared to the previous letter. It basically tore into SEC’s detailed “leaked” 7-page letter to Oando’s Chairman and was addressed to the acting DG of SEC Mary Uduk.
- Eagle-eyed readers of the second letter may have noticed that it was purportedly written by the Chairman of Oando, but it was never signed.
Then came the denial; a sharp one. As investors, regulators and members of the public marvelled at the scathing second letter, the Oando crack team immediately denied authorship of the letter claiming it “has not officially released a statement or letter in response to the SEC.”
By Monday, June 3rd, three days after the damning order from the Security and Exchange Commission the crack team made their move. They received a hugely welcomed court injunction from the Federal High Court of Lagos restraining the Securities & Exchange Commission from executing sanctions against Oando.
It was a huge respite for the crack team and a development that bought them some days to put together a challenge on all fronts that will stop the onslaught that could likely open up a can of worms never seen in the annals of regulatory orders on corporate Nigeria.
Why it matters – Oando’s battle to keep SEC from sacking its Managing Team and Board in place of an interim board is one of survival not just for the CEO, Wale Tinubu and his deputy, Mofe Boyo, but for the entire rank and file of its management team past and present. The reasons are understandable and one in their shoes can comprehend if the SEC Order is left to stand.
- Firstly, a criminal charge can be brought against key members of the Board and Management of Oando Plc. Criminal charges in Nigeria are tough to win by prosecutors, but its fallouts are damaging to the accused, win or lose.
- Secondly, an Interim Board will commence another round of investigation into the operations of the company. Experience from past board takeovers shows interim management hardly have sympathy for immediate past management and often lay on more allegations even when they are unsubstantiated.
- Also, Oando’s history of complex related party transactions could be in the spotlight and may be spun in a way that is further detrimental to the existing board, their family, partners and friends. This may set the stage for even more legal squabbles.
- In addition, current contracts, deals including obligations by Oando could come into scrutiny by an interim board, threatening the interest of business partners, customers, suppliers, debtholders, trade creditors etc.
- Lastly, but certainly not the least, shareholders of Oando could lose their entire investment in the company. Regulatory induced board room takeovers could set off a chain of events that could render the company insolvent, inviting the likes of AMCON to take it over.
For all its worth, those against Oando and those for, it is important that this matter is settled with an outcome that is seen as the best for Oando shareholders, the investing community, the stock market and Nigerian Economy in general.
The rule of law must be allowed to prevail no matter how grave the allegations are. Oando’s board and management have a right to defend themselves just as SEC is within its right to issue an order if it believes that infractions were committed by the company.
For now, it only makes sense that Oando will fight with all its disposal to save Wale Tinubu, Mofe Boyo and the rest of its board and management.