Some shareholders in Nigeria’s capital market have faulted the sanction placed on Oando Plc by the Securities and Exchange Commission (SEC).
Speaking on behalf of Oando’s shareholders yesterday, Alhaji Kabiru Tambari, alleged that SEC‘s intention is to kill the company. According to him, the regulator’s actions against the oil company defies logic.
He went further to state that his fellow shareholders and himself are not happy over the situation.
“We are not happy at all with has happened. Wale Tinubu and his management team have suffered, they have put their resources; energy, time; to keep this company moving forward and now the SEC wants to take it away from not just them but us the shareholders as well.
“When the company was making losses the SEC didn’t bring up all these infractions and sanctions, but now the company is doing well and has returned to profit and they’ve come with such drastic actions. This will foil the company’s attempt to pay us dividend at the end of the year. It is clear that the SEC wants to kill the company.”
Atedo Peterside’s Reaction: Earlier on, the Founder of Stanbic IBTC Holdings Plc, Atedo Peterside, expressed his concerns over the development. He specifically wondered why the capital market regulator was refusing to publicly disclose the supposed findings from its investigation into the affairs of Oando Plc.
On Oando, what I dont understand is why the SEC would not give the findings of the Forensic Audit to Oando and give them an opportunity to defend themselves? The findings of the Forensic Audit should be made public alongside Oando's responses so we can all judge for ourselves?
— Atedo Peterside (@AtedoPeterside) June 1, 2019
Why shareholders are furious: According to the shareholders, the move by the Securities and Exchange Commission on the company could cause the following;
- Devalue the company’s share price, thereby putting its shareholders on the losing end.
- Affect the company’s intention to pay its shareholders dividend at the end of the year.
- The company might even be unable to pay salaries, thereby causing job loss.
- It would weaken market confidence in the company.
- It would deter foreign direct investments (FDIs) in the company.
Injunction against SEC: As Nairametrics reported, SEC’s announcement of an interim management team for Oando Plc was met with immediate legal action by Wale Tinubu, the GCEO of the company. Consequently, a Federal High Court in Lagos gave a ruling on Monday, which restrained the regulator from removing either Wale Tinubu and his Deputy, Omamofe Boyo.
All this hue and cry about Oando not being privy to the forensic report is balderdash. It is not possible for an auditor to undertake an audit, be it forensic or otherwise, without engaging the management of a company. So even in situations where an auditor is appointed by a regulator, the auditor first informs the management of the company under investigation of its scope of work and requests for supporting documents and or information to make its findings. This means that even when the auditor has concluded its work and submits its report to the regulator, which appointed it in the first instance, the management of the company already has an inkling of the content of that report, because it is the management that either provided or withheld information from the auditor. Long and short, an audit cannot be conducted in a vacuum.
This case with Oando reminds me of the US company Enron and the activities that led to its demise in 2001.
Both companies were in the oil business and both were accused of cooking up their books to fool investors.
In the case of Enron, it ended with a lot of casualties including closure of accounting firm Arthur Andersen, jail term for Enron’s top management and of course the financial bankruptcy of the firm.
In Oando’s case, it appears the SEC is at least trying to save the company by appointing an interim Board of Directors.
I disagree that the SEC’s actions is hurting the company. It cannot turn a blind eye to improprieties in publicly listed companies. It’s primary function is to safeguard the interest of shareholders by ensuring that publicly listed companies abide by the agency’s high ethics standard.
The world is watching to see how this case ends. Investor’s funds have to be protected, otherwise foreign investments dry up.
“Affect the company’s intention to pay its shareholders dividend at the end of the year.” – Really ? When did OANDO pay a dividend last ?
I think wale tinubu is gone by commission or by mistake oando plc.public listed company.the company does not belong to wale tinubu,it belongs to shareholder,if the sec does not take some action against oando.THERE WILL BE A SHIFT IN MANAGEMENT OF SEC,IF NO ACTION IS TAKEN AGAINST THE MANAGEMENT OF THE COMPANY.
lets concentrate on evidence and what we know.the man is the problem for the company.it needs a clean sweep,the main issue is the management is incompentency and mis-management of the company’s resource.This investigation was initiated at the instances of other shareholder.
Complaint was lodged with sec against oando.it does not to be a genius to see what is the problem with the company,they are milking the company dry at the expenses of the company and other staff of the company.if sec fails to act,there will be other civil court cases
Thank you.I am in Support of SEC Action Aterall They have disclosed what led to Forensic Investigation and the Out come was Given to management of O and O without given Satisfactory answers as Investor who was disappointed about my Investment Rights Issue Twice Yet no Dividend Year in Year Out and Chairman and Directors are able pay themselves forgetting Shareholders I want my money @ 12 Naira plus and Expected dividend over the Years I need Conviction !!! Anybody that has Contrary view Should be Ready to pay me back all I have invested !!