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Why shareholders are upset over SEC’s “punishment” of Oando Plc

Some shareholders in Nigeria’s capital market have faulted the sanction placed on Oando Plc by the Securities and Exchange Commission (SEC).

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Oando Plc, Eni, Fraud, SEC

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.”

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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.

Why shareholders are furious: According to the shareholders, the move by the Securities and Exchange Commission on the company could cause the following;

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  • 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.

5 Comments

5 Comments

  1. Ijeoma Nwogwugwu

    June 7, 2019 at 6:58 am

    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.

  2. John

    June 7, 2019 at 6:22 pm

    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.

  3. Meki

    June 7, 2019 at 6:44 pm

    “Affect the company’s intention to pay its shareholders dividend at the end of the year.” – Really ? When did OANDO pay a dividend last ?

  4. Anodebenze

    June 10, 2019 at 2:48 pm

    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

  5. Tajukola

    June 18, 2019 at 8:26 am

    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 !!

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Companies

GMD, 2 Executive Directors buy 5 million additional units of Zenith Bank Plc shares

In three separate transactions, major stakeholders purchased 5 million units of Zenith Bank’s shares.

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Executive Director buys 2 million additional Units of Zenith Bank Plc Shares.

Zenith Bank Plc, Group Managing Director, Mr Ebenezer Onyeagwu, and two Executive Directors, Messrs. Dennis Olisa and Ahmed Umar Shuaib, have purchased an aggregate of 5 million units of additional Zenith Bank Plc shares.

This was disclosed by the bank, in a notification sent to the Nigerian Stock Exchange, and seen by Nairametrics.

According to the notification, signed by the Company’s secretary, Michael Osilama Otu, the purchase was made in the bourse, over three transactions on the 16th and 17th of September, 2020.

As part of the regulatory requirements, the disclosure must be reported to the Nigerian Stock Exchange, especially when the trade is executed by a major shareholder or director of a listed firm.

Breakdown of the deal

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According to the details of the deal verified by Nairametrics, Mr. Dennis Olisa pulled the highest deal as he purchased 2,000,000 additional units of Zenith Bank Plc’s shares at an average of N17.18 per unit, totaling N34.36 million. Mr. Ahmed Umar Shuaib also purchased 2,000,000 additional units of the Bank’s share, at an average price of N16.99 worth N33.98 million. Completing the trio was, Mr. Ebenezer Onyeagwu who purchased 1,000,000 additional units at an average of N17.05 worth N17.05 million.

This major purchase boosted the total number of trade deals (Volume) posted by the Bank in the NSE market, as the deals contributed about 11.61% of the Bank’s total deals between 16th and 17th of September, 2020.

(READ MORE: Zenith Bank rewards customers with massive giveaways in the “Zenith Beta Life” weekly promo)

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What this means

Based on the recently released H1 2020 Financial Results of Zenith Bank, Mr. Ebenezer Onyeagwu had 45,500,000 direct shares as of June 30, 2020. Mr. Ahmed Umar Shuaib had 7,577,343 direct shares, while Mr. Dennis Olisa had 7,122,316 direct shares. All these remained unchanged from their reported shares in H1 2019.

With the addition of 1,000,000 shares, Mr. Ebenezer Onyeagwu’s stake increased to 46,500,000, indicating an increase of 2.19%. Mr. Ahmed Shuaib’s shares also leaped by 26.39% to 9,577,343, while Mr. Deniss Olisa’s shares increased by 28.08% to 9,122,316 direct shares.

This deal may signify that the Bank’s insiders expect an increase in share price. It is a positive signal to outsiders, coming from top insiders who are abreast with latest information on the Bank’s prospects.

This can play a vital role in stimulating a bullish trend. Zenith Bank’s share price is currently trading at N16.70 on the NSE.

Conclusion

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Regardless of the impact of the pandemic on the income and revenue of banks, Zenith bank still remained one of the high-flying financial organizations in Nigeria. For example, the tier-1 bank’s gross earnings grew by 4.37% from N331.5 billion in H1 2019 to N346.1 billion in H1, 2020. Its Profit After Tax increased by 16.81% from N111.7 billion to N114.1 billion within the period under review. The aforementioned factors might have been the reason behind the recent bullish trend for its stock.

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Business

FG apologizes, says Self-Certification directive is not for everyone

The Federal Government has made clarifications concerning earlier announced Self-Certification Forms.

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FG apologizes, says Self-Certification directive is not for everyone, FIRS introduces stamp duty on house rent and C of O transactions

The Nigerian government has backtracked on its earlier issued guidelines on the new banking Self-Certification Forms, saying the notice does not apply to everyone.

On Thursday, the Nigerian government ordered all persons holding accounts across financial institutions and insurance firms, to complete and submit self-certification forms to their respective financial institutions.

Explore the Nairametrics Research Website for Economic and Financial Data

It stated, “This is to notify the general public that all account holders in Financial Institutions (Banks, Insurance Companies, etc.) are required to obtain, complete, and submit Self – Certification Forms to their respective Financial Institutions. Persons holding accounts in different financial institutions are required to complete & submit the form to each one of the institutions. The forms are required by the relevant financial institutions to carry out due diligence procedures, in line with the Income Tax Regulations 2019.”

However, on Friday morning, after receiving expected backlash on social media, FG attempted a clarification stating, “We apologize for the misleading tweets (now deleted) that went up yesterday, regarding the completion of self-certification forms by Reportable Persons,” and that, “the FIRS will clarify Nigerians on the objectives of the directive.”

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READ: CBN automates trading system, introduces electronic form to facilitate exports 

The FIRS earlier today made a statement, that the guidelines are only for non-residents, and people paying tax in more than one country.

READ: Tax implication of IFRS adoption in Nigeria: key issues

“The Self Certification Form is basically to be administered on Reportable persons, holding accounts in Financial institutions, that are regarded as “Reportable Financial Institutions” under the CRS. Reportable persons are often non-residents and other persons, who have residence for tax purposes in more than one jurisdiction or Country.”

“The information that indicates an account holder is a resident for tax purposes in more than one jurisdiction, is expected to be available to Financial Institutions during account opening processes, for the KYC and AML purpose.” the statement read.

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Business

This is a copy of the Self-Certification form govt. wants targeted account holders to fill

The FIRS posted a copy of the self-certification form on its website.

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This is a copy of the Self-Certification form govt. wants targeted account holders to fill, President Muhammadu Buhari's full speech at China-Africa Extraordinary Summit on June 17, 2020

The Nigerian government on Thursday tweeted an order to all persons holding accounts across financial institutions and insurance firms to complete and submit Self-certification forms.

This was announced by the Federal Government in a social media statement on Thursday. The FG warned that failure to comply may include a monetary penalty or inability to operate the account.

READ: FG to save N1 trillion annually from petrol subsidy removal

The Government also urged Nigerians to comply with the requirements and execute all forms needs, if not sanctions may be introduced in the forms of monetary penalty or inability to operate the account.

The government however deleted the tweet on Friday, explaining that it does not apply to everybody, contrary to what it had earlier tweeted. The FIRS claims those affected are non-residents.

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READ: Despite billions on agriculture, food inflation up by 108% since 2015

Nairametrics has seen a copy of the “Self-Certification Forms” detailing the information that account holders are meant to share. See below;

NB: This article has been updated to reflect new information regarding who the accounts holders (reportable persons) are.

READ: UK to impose visa ban, seize assets of Nigerians for electoral offences

Download (PDF, 839KB)

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