11 June 2019

Nigeria: Mixed Reactions Greet SEC's Suspension of Oando's AGM

Abuja and Lagos — Some shareholders of Oando Plc yesterday protested as the Securities and Exchange Commission (SEC) suspended the company's annual general meeting (AGM), billed to hold today.

SEC had announced the suspension of the AGM in furtherance of an ex-parte order of the Federal High Court, Ikoyi, Lagos in Suit No: FHC/L/Cs/910/19 in Mr. Jubril Adewale Tinubu & Anor V Securities & Exchange Commission & Anor.

According to the commission, based on the court order, the AGM of Oando Plc scheduled to hold today has been suspended till further notice.

SEC said the action was taken to allow the parties to maintain status quo, adding that it would update the public on the outcome of the ongoing litigation.

But while some of the shareholders said the suspension of the AGM was neither in favour of the investors nor the capital market, others lauded the regulator for its action.

Chairman, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie, said the regulator should have allowed the AGM to hold.

"I think SEC has not done the right thing because the AGM has been approved before now. Suspending it will lead to loss for the company, which has also booked for the venue and paid for other things necessary for the meeting to take place. What I think SEC should have done is to come and observe," he said.

Okezie added that since the release of the forensic audit result, the shareholders have not had the opportunity to hear from the directors, noting that the AGM would have afforded them the opportunity to get more information from the board of the company.

Also, the Chairman, Ibadan Zone Shareholders Association of Nigeria, Mr. Eric Akinduro, said suspending the AGM was unfortunate.

He said: "There should be a human face to some of these things. There is a court order saying the status quo should be maintained and I believe the AGM is one of the things referred to by the court order.

"Suspending an AGM 24 hours to the meeting is not good for the shareholders and even the market. Some of the shareholders have travelled from other states to Lagos for this AGM."

However, the President, Constance Shareholders Association of Nigeria, Mallam Shehu Mikail, said SEC did the right thing.

"To me, SEC has done the right thing because there are so many issues in the company right now and we do not know how the meeting will look like. So, the proper thing is to suspend the meeting. If Oando goes ahead to hold the AGM, it means it is disrespecting the market regulator," he said.

An outraged shareholder, Pastor Olagoke Samson Olusegun, who is President of De-Impressive Shareholders' Association of Nigeria, disagreed with SEC's decision.

He said: "This is simply a game because before we announced the AGM, SEC approved our accounts. So why now? Why is it when Oando is climbing out of the hole of debt and returning to profitability? Like Skye Bank, they want to take Oando over and give to their friends. We will fight to the end as shareholders. If we have to go and meet SEC in Abuja, we will. The SEC is functioning like a car with no engine - and in this game, the only people who suffer are we the shareholders. We will not tolerate it!"

Other shareholders who had come from the North were shocked that the SEC would cancel the AGM less than 24 hours to the event.

Alhaji Kabiru Tambari who came from Sokoto said: "There are no words to describe my shock and disappointment at how this is being played out. The SEC could not have made this decision to cancel the AGM overnight so it is unfair that they would tell us today, a day before the event. I spent money getting here; I have paid for accommodation and I will have to spend another night in Lagos. All expenses that I will never get back. Is SEC really working in my best interests?"

As at the end of business yesterday, Oando had not issued a statement to react to SEC's suspension of its AGM; a sign that it might comply with the decision.

In 2017, SEC had requested that Oando postpone its 40th AGM whilst the commission addressed allegations raised by some petitioners.

But Oando had responded that it had responded to all of SECs enquiries and it would also not be in the interests of its shareholders to postpone the AGM and so it would be proceeding as planned.

Accordingly, the AGM held in Uyo just as it was learnt then that there was no power in the Investment Securities Act that gives SEC such powers.

Oando had said at the time that if SEC had insisted on compliance with its directive, it would have relied on this to challenge the decision.

Some of the shareholders also accused SEC of high-handedness.

"What SEC is doing can only be described as regulatory rascality, and it is unfortunate that this is coming from a regulator. Are they regulators or revenue generators? We should go ahead with our AGM as though nothing happened. We should continue as planned with our AGM. SEC tried to do this in the case of Ikeja Hotels, but we did not let them stop us, we had our AGM under a tree," an Oando shareholder, Tunde Badmus, said.

Efforts to get the company to react to the development proved abortive.

SEC had on May 31, 2019, announced the conclusion of investigation of Oando Plc and directed among others the immediate resignation of its Group Managing Director, Mr. Wale Tinubu, his deputy, Mr. Mofe Boyo and other directors.

The apex regulator also barred Tinubu and Boyo from being directorship of public companies for a period of five years.

The commission followed later with the constitution of an interim management team led by Mr. Mutiu Sunmonu.

But Oando challenged the decisions in court and got the Federal High Court, sitting in Lagos, to issue orders restraining the commission from implementing any of its May 31 decisions.

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