Nigeria: Capital Market Operators Seek Govt's Intervention in SEC, Oando Dispute

Nigerian oil company, Oando.
6 June 2019

Abuja — Capital market operators have called for the urgent intervention of the federal government in the conflict between the Securities and Exchange Commission (SEC) and Oando Plc.

The operators reacted to the outcome of a forensic audit on Oando, which was released by SEC on May 31, as well as a court injunction restraining SEC from sacking Oando's Group Chief Executive Officer (GCEO), Mr. Adewale Tinubu, and his deputy.

The operators applauded the courage of SEC's Acting Director-General, Ms Mary Uduk, in releasing the outcome of the forensic audit.

The News Agency of Nigeria (NAN) reported that following the outcome of the forensic audit, SEC on June 2 constituted an interim management team to be headed by Mr. Mutiu Sunmonu for Oando Plc.

It said in a statement that Sunmonu would oversee the affairs the company and conduct an Extra Ordinary General Meeting (EGM) on or before July 1, to appoint new board of directors.

The commission said that the new board of directors would subsequently select a management team for Oando Plc.

The commission reiterated its commitment to maintaining the integrity of the market.

However, a Federal High Court in Lagos on June 3, granted an interim injunction restraining SEC from executing the interim management in Oando.

The court injunction followed an application filed by Tinubu and his deputy, Mr. Omamofe Boyo.

Tinubu and Boyo applied for the enforcement of their fundamental rights.

The court also restrained SEC from imposing a fine of N91.13 million on Tinubu, and barring him and Boyo from being directors of public companies for five years.

Reacting to these developments, the Chief Operating Officer, InvestData Ltd., Mr. Ambrose Omordion, said that the federal government would need to intervene in the matter to safeguard investors' confidence.

Omorodion said that the unfolding events between Oando and SEC could dampen investors' confidence and tamper with Nigeria's integrity.

He said that the international investment community was watching to see the manner the Oando issue would be handled.

"The way SEC and government will handle this issue will go a long way to determine the success of the nation's drive for financial inclusion and attraction of new retail investors and foreign investors returning to the market," Omorodion state.

He also urged the government to strengthen the commission by ensuring appointment of its board members soon.

Omorodion expressed disappointment that SEC had been operating without board for about four years and had been with an acting director-general for over a year.

The Publicity Secretary of Independent Shareholders Association of Nigeria (ISAN), Mr. Moses Igbrude, alleged that shareholders had suffered enough loss in Oando with no dividend and poor market pricing.

Igbrude said that court injunction could lead to long legal battles which could further affect the company's shares price on the Nigerian Stock Exchange (NSE).

He urged the exchange to place the share price on technical suspension to protect investors from further loss.

The shareholder activist said that SEC should not allow its authority to be undermined if the outcome of the forensic audit was true.

"I will appeal to whoever that is affected to obey the directives from SEC for the sake of our investments.

"Oando as a company has suffered enough of reputational risk, adding that shareholders, for a long time, have not been paid dividend," Igbrude said.

The National Chairman of Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, told NAN: "The grass suffers when two elephants fight."

Okezie said that SEC and Oando must maintain the peace in the interest of all stakeholders, especially retail investors.

The PSAN boss, who commended the commission for protecting investors, said that SEC should also beam searchlight on other oil companies quoted on the exchange.

On his part, the National President, Constance Share-holders Association of Nigeria, Mr. Shehu Mikail, said that Oando crisis needed a holistic approach to restore confidence.

"Oando saga is a big issue in the Nigerian capital market that needs a holistic approach if really we are going to adhere to the truth of corporate governance," Mikali said.

He said that the action of SEC was in the right direction and aimed at protecting the interest of Oando shareholders.

"Foreign investors are watching the drama and local shareholders and stakeholders are also awaiting," Mikali added.

He told NAN that the outcome of the saga would determine the direction of the capital market.

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