6 September 2017

Nigeria: SEC Intervenes in Foreign Investors' Dispute Over Oando's AGM

THE Securities and Exchange Commission, SEC, has moved in to douse tension ahead of the 40th Annual General Meeting (AGM) of Oando Plc scheduled for next week Monday in Uyo, Akwa Ibom State. Ansbury, the indirect foreign investors in the major oil company, had sent another petition to the Commission, seeking to suspend the AGM over what they see as failure of corporate governance in the major oil company.

Vanguard learnt that SEC has already set up an 11-man task force to look into the matter and report back for it to take action before the AGM date. In the interim report of the first meeting of the task force which Vanguard sighted, titled, 'Serious concern to corporate governance existence, gross abuse of corporate governance and financial mismanagement in Oando Plc', the task force outlined three possible ways forward for the corporate dispute as follows:

"-Ansbury (indirect foreign investors in Oando Plc) should write a letter to Oando Plc in response to the Notice of Meeting (AGM) stating that there is no valid representation for OODP Nigeria (core investors in Oando Plc); -Ansbury should file an action in court for an order postponing the AGM or in the alternative, for an order of injunction restraining Oando Plc from entertaining any representation from OODP Nigeria during the AGM; and -Ansbury should prepare a detailed written submission stating grounds upon which SEC should postpone the AGM."

In reply to the comments credited to representatives of the foreign investors, the Chairman of the task force, Mr. Charles Udorah, had remarked that the comments of the task force were not the official position of SEC as it is an independent committee and the ultimate decision will be that of SEC's management. They noted, however, that "if SEC is to postpone the AGM, they must be provided with a strong basis that they will be able to defend if they are called upon to justify their action."

They stated further: "Ansbury was advised to provide a strong written submission addressing all the areas discussed and the issues raised during the meeting and stating the grounds on which SEC should postpone the AGM." In conclusion, the Committee stated that SEC was working on Ansbury's petition and will continue to investigate the issues raised by Ansbury to a logical conclusion.

Mr. Silvano Bellinato, representing Ansbury had told the task force that Ansbury is not a direct shareholder of Oando Plc and stated that the company was requested to attend the meeting following the last letter of Ansbury, dated August 17, 2017 sent to the SEC, seeking the assistance of the Commission for the postponing of the Oando AGM as per the evidences provided.

Also, another representative of Ansbury, Mr. Mike Epelle, referred the task force to the Ansbury's letter of August 17, 2017 and explained that the controllers of Whitmore (another major institutional investor in Oando Plc), who are the same persons in control of Oando Plc, have frustrated every effort to constitute the board of OODP Nigeria, the majority shareholder of Oando Plc.

According to the task force report: "He further explained that by the Shareholders Agreement (SHA) entered into by the parties, Ansbury is entitled to three board positions while Whitmore is entitled to two board positions. Ansbury appointed Mr. Epelle as the third director to replace a director that resigned.

Foreign investors' agitation

The relevant resolutions and documentation in this regard were duly signed by Ansbury's representatives and forwarded to the company secretary for signing by Whitmore representatives and filing at the Corporate Affairs Commission (CAC). The partners, however, refused to file the documents at CAC."

Epelle informed the task force that intervention of SEC is necessary as the primary regulator to protect the interests of all shareholders and investing public in general. Part of the reasons for the foreign investors' agitation against the proposed AGM, Vanguard learnt, was that Ansbury is alleging that Wale Tinubu, the Chief Executive Officer (CEO) of Oando Plc, is trying to prevent the main shareholder of Oando, indirectly Ansbury, from taking any decision in Oando Plc, because Ansbury is planning to remove him (Tinubu) from the position of CEO of the company.

Other moves by Ansbury, Vanguard learnt, also include removal of all the components of the Board of Directors, reject any proposal concerning the remuneration of the CEO and the Directors of Oando PLC, and eventually reject the approval of the Annual Report 2016.

In a response to the petitions and allegations of the foreign investors the management of Oando Plc had stated: "The Company's position remains that these petitions have no merit as the issues raised have received board, shareholder and where required, SEC approval. Other matters highlighted by the petitioners could have been directed to the Company and would have received the necessary clarification."

"Furthermore the petitions have been filed by Ansbury Inc ("Ansbury"): This petitioner is not a shareholder of the Company, but a shareholder in a company domiciled in a jurisdiction outside Nigeria which in turn holds shares in a Nigerian investment company that is a shareholder in Oando."

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