5 December 2017

Nigeria: Updated - SEC Writes Oando Again, Orders Firm to Open Doors to Forensic Auditors From Wednesday

The Securities and Exchange Commission, SEC, on Tuesday announced its resolve to commence the forensic audit of Oando Plc.

The development came few days after the suspension of the former Director-General of the Commission, Munir Gwarzo, under controversial circumstances.

Suspended alongside Mr. Gwarzo were two officials of the regulatory commission, Abdulsalam Habu, Head of Media Division, and Anastasia Braimoh, Head of Legal Department.

The finance ministry in the statement signed by Patricia Deworitshe, Deputy Director, Press, announced that the officials were suspended based on corruption allegations against them.

The suspension of Mr. Gwarzo raised suspicion among stakeholders about the plan to audit Oando. But in a letter addressed to the Group Chief Executive Officer of the company, Adewale Tinubu, on Tuesday, SEC reaffirmed its plan to look into the books of the company.

The letter, which was signed by the Acting Director-General of SEC, Abdul Zubair, said the forensic auditors would be at the premises of Oando from Wednesday to undertake the audit.

The letter, seen by PREMIUM TIMES, said the commission is aware that a suit seeking to restrict it from conducting the audit had been struck out.

The letter, titled 'Re: Forensic Audit into the Affairs of Oando Plc', reads in part: "Further to our letter to you dated November 27, 2017 and another letter to your lawyers dated November 28, 2017, wherein the Commission had notified Oando Plc of its decision to go ahead with the Forensic Audit, the Commission in the light of recent development wishes to reiterate the following:

"That the Commission is aware, that Suit No: FHC/L/CS/1601/17: OANDO PLC V. SEC & ANOR was struck out on November 23, 2017 by his Lordship Hon. Justice Aikawa of the Lagos Division of the Federal High Court.

"That the Commission is not aware of the existence of any valid or subsisting Order of Court restraining the Commission from proceeding with the Forensic Audit."

SEC said that while a Notice of Appeal has been filed to challenge the judgment of the Federal High Court, the notice does not serve as an Order of Court restraining the Commission from conducting the exercise.

"We wish to restate that our Forensic Auditors had been directed to commence work since November 27, 2017 and as a result shall be at your premises on any date from Wednesday, December 6, 2017," the letter stated.

Oando plc has in recent weeks been at the centre of controversies following the technical suspension placed on its shares by the Nigerian Stock Exchange, NSE.

Subsequently, the Johannesburg Stock Exchange, JSE, also suspended the shares of the oil company.

The NSE decision came after SEC directed that the shares be suspended, following petitions sent to the commission by some stakeholders of the oil firm.

The proposed forensic audit of Oando followed two petitions SEC received from concerned shareholders, Dahiru Mangal and Ansbury Incorporated, about alleged mismanagement of the company's financial affairs and distortion of its shareholding structure.

SEC said it conducted a comprehensive review, which revealed massive breaches of the provisions of the Investments & Securities Act 2007 and the SEC Code of Corporate Governance for Public Companies.

Consequently, the Commission announced the appointment of a consortium of experts, consisting auditors, lawyers, stockbrokers and registrars, to conduct the forensic audit, while shares of Oando Plc at the Nigerian Stock Exchange, NSE were placed on temporary technical suspension.

The technical suspension, which is still in place, implies that while trading on Oando stock is still allowed, there will be no price movement in the company's shares.

The oil firm had earlier lost a bid to stop the forensic audit but a Federal High Court ruled against it two weeks ago.

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