Alleged False Disclosures: Oando replies SEC, says no fair-hearing given

The ongoing tussle between Oando Plc and the Securities & Exchange Commission (SEC) seems unending because the oil and gas company just replied the regulator’s claim that it gave a “fair hearing” in its investigation into the company.

Recently, SEC claimed that “Oando Plc was given sufficient opportunity of being heard and accorded several opportunities to rebut the issues revealed by the investigation.”

The capital market regulator went on to state that these opportunities were made via engagement with Deloitte & Touche in the course of its audit of the company’s business.

Oando’s Position: In response to SEC’s claim, Oando Plc argued that a hearing can only be said to be fair when all the parties to a dispute are given an opportunity to present their respective cases. The company also argued that each side should be entitled to know the details of the case/findings being made against it, as well as given an opportunity to reply thereto.

The company, therefore, disagreed with SEC’s position, maintaining that it was not accorded a fair hearing “because we simply co-operated with the process and responded to questions posed by the auditors in the course of their fieldwork for findings in a report that the Company has still not seen.

To corroborate the company’s claim that it was not accorded a fair hearing during the investigation, Oando Plc stated the following;

• Prior to the commencement of the forensic audit, the company was not afforded the same opportunity to meet with the SEC as was afforded to the petitioners, despite repeated written requests to that effect. The first of these requests was on Thursday, August 24, 2017, from the Chairman, HRM Oba Michael Adedotun Gbadebo CFR who wrote to the then SEC Director-General as follows “We would like to request for a meeting with you, in your capacity as Director General of the SEC and regulator on matters involving the securities of our Company, to formally table our concerns to you and clarify any further questions that you may have in respect to the issues that we have raised in this and previous letters to the SEC.”
• During the 18-month long forensic audit exercise, the Company was never given an
  opportunity to present its case based on the concerns or findings of the Forensic auditor
  to the SEC.
• In the kick-off meeting with Deloitte on the 29th of March 2018, they assured the Company that we would be allowed to read their report on the forensic audit and give further clarification or comments on matters raised in their report. Minutes from the meeting which was shared with parties in attendance state “Deloitte concluded by repeating that the audit will be done fairly and from a factual perspective. There will be ‘no surprises’. Oando will be allowed to read their report on the Forensic Audit and give further clarification or comments on matters raised in the report.”
• In the course of Deloitte’s forensic audit exercise, the Company had a second meeting
  with Deloitte on the 1st of November, 2018, and this was at the Company’s insistence. At the said meeting Deloitte promised that on the conclusion of its audit it would hold a closeout meeting with the Company, however, this meeting never took place.
• With the exception of the aforementioned meetings, all other engagements with both the SEC and Deloitte were via letters and emails.
• On Monday, February 11, 2019, at Oando’s request the Company’s management team
  met with the SEC for the purpose of getting approval for certain proposed transactions
  as part of our corporate strategy pending the release of the Forensic Audit. At the said meeting the Company was assured by the Acting Director General (DG), Mary Uduak
  that they would call us in to defend the findings from the forensic report before making a final conclusion. A promise that she has not honored.

More so, Oando Plc disagreed with the assertion by SEC in its press release that “the actions of the Commission were properly effected pursuant to the provisions of the Investments and Securities Act (ISA) 2007 and the SEC Rules and Regulations made pursuant to the ISA 2007”.

By virtue of the asserted provision, Oando Plc alleged that SEC circumvented its own rules and procedures when it failed to invite the company to appear before the APC and hear its position. The Commission, according to Oando, instead approached the media to publish the purported findings and punitive directives against the Company.

Genesis: Oando and SEC have been at loggerheads since the regulatory body released its investigation into the activities of the management of the company. SEC accused the management of market abuses and false disclosures, demanding the resignation of Tinubu, the Board chairman, and other executives and directors of the company.