Oando berates media for reporting that it is under investigation by SEC; Channels pull down story


In an uncanny press release issued on the website of the Nigerian Stock Exchange, Oando Plc berated media houses for reporting that it is under investigation by SEC.

Oando chastising media

Oando expressed its disdain for media reporting without getting their own side of the story.

The Company is concerned about media houses going public with information without first obtaining a balanced view as this may in some cases lead to the publication of unconfirmed, misleading and damaging information. Oando is a public listed company quoted on both the Nigerian and Johannesburg Stock Exchanges and any damaging information in the public domain could have a material impact on the Company. We therefore demand an immediate retraction of the report and urge media houses to refrain and/or desist from further publications in future, without first verifying the accuracy of such facts from Oando.

Channels TV had reported earlier on Friday, that the quoted oil company is currently under investigation by the Security and Exchange Commission over an alleged complaint by some foreign shareholders of the company. Channels Television has since pulled down the story.

Excerpt of Channels original report

“Oando is under a comprehensive investigation by the Securities and Exchange Commission…..following petitions filed by some foreign investors in Oando Nigeria PLC, in relation (sic) shareholding structure following the 1.65 billion Dollars cash that Oando paid in June 2014 to acquire the oil production assets of Conoco-Phillips in Nigeria…”.

Oando Explanation

According to Oando, it reveals in the press release that they are aware that “SEC is in receipt of correspondence containing (in our opinion) unsubstantiated, misleading and defamatory claims with respect to various matters that had already received board, shareholder and where required SEC approval”.

Oando also revealed that it is fully co-operating with the SEC  by providing all appropriate clarifications and rebuttals on the matters raised in the said correspondence. Oando also committed to providing full disclosure of the outcome as soon as the SEC review is completed.

Note that Oando avoided using the word “investigation” in their report.

So what’s the fuss about?

It’s not clear why Oando is so upset about Channels report as their press release did not deny the claim in any way. In fact, it admitted that SEC was in position of a of what it said was “unsubstantiated, misleading and defamatory ” without exactly explaining what the allegations brought against them were.

However, Channels TV withdrawal of the story suggest they may have been wrong in asserting that the allegations had to do with the Conoco-Phillips deal.

What we can conclude

  • There is an allegation against Oando
  • SEC is aware and are investigating (ignore the semantics) which is why Oando is responding
  • Oando did not provide details on what the allegations are.

NSE/SEC Role

As usual, capital market regulators, SEC and NSE also did not get Oando to disclose publicly that it was under investigations and getting them to disclose fully what the investigation is about. The press release issued by Oando is also a further example of the sort of information asymmetry that currently exist in the capital market.

Oando’s share price fell 9.5% at the end of closing on Friday.

 

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