The Securities and Exchange Commission, SEC, on Wednesday ordered a full suspension of the trading of shares of Oando Plc for two days.
The commission also directed that effective from Friday, October 20, the Nigerian Stock Exchange should implement a technical suspension of the shares of the company.
SEC in a notice posted on its website on Wednesday morning said it took the decision after it received two petitions from Dahiru Mangal and Ansbury Incorporated.
The Commission explained that it carried out a comprehensive review of the petitions and discovered issues of breach of the provisions of the Investments & Securities Act 2007, breach of the SEC Code of Corporate Governance for Public Companies, suspected insider dealing, related party transactions not conducted at arm’s length, discrepancies in the shareholding structure of Oando Plc, among other discrepancies.
“The Commission’s primary role as apex regulator of the Nigerian Capital Market is to regulate the market and protect the investing public,” it said.
“The Commission notes that the above findings are weighty and therefore needs to be further investigated. After due consideration, the Commission believes that it is necessary to conduct a forensic audit into the affairs of Oando Plc.”
“This is pursuant to the statutory duties of the Commission as provided in section 13(k), (n), (r) and (aa) of the ISA 2017.”
According to SEC, to ensure the independence and transparency of the audit exercise, the forensic audit shall be conducted by a consortium of experts made up of auditors, lawyers, stockbrokers, and registrars.
“To further ensure that the interest of all shareholders of Oando Plc are preserved during the course of the exercise, the Commission directed the Nigerian Stock Exchange to place the shares of Oando Plc on technical suspension,” it said.
The commission, however, noted that in view of the fact that it is not technologically feasible for the Exchange to effect a technical suspension except after 48 hours, it has directed the Nigerian Stock Exchange to implement a full suspension in the trading of the shares of Oando Plc, effective for 48 hours from Wednesday to Friday 20.
Meanwhile, effective from Friday and until further directive, SEC said that the NSE should implement a technical suspension in the shares of Oando Plc.
Oando Plc has in recent time been enmeshed in crisis which led to attempts made by some shareholders to disrupt its Annual General Meeting held recently in Uyo, Akwa Ibom State.
The AGM was reportedly disrupted for over ten minutes as the protesters chanted songs seeking the resignation of the company’s Group Chief Executive, Wale Tinubu.
The protesters, who stormed the venue under the aegis of “Oando Shareholders’ Solidarity Group,” said they were protesting in order to change the management of the company due to alleged gross mismanagement and abuse of corporate governance.
They also claimed that they had read several reports on the gross mismanagement of Oando by the present management of the company and called on Mr. Tinubu to step down and allow a competent hand to manage the affairs of the company.
The protesters also called on the Securities and Exchange Commission, SEC and Nigerian Stock Exchange, NSE, to commence the immediate investigation of the company to determine the true state of the financial position and corporate practice.
But the oil company in a statement described the protesters as “paid, dubious characters,” who are not genuine shareholders of the company.
In September, the House of Representatives Committee on Capital Market and other Institutions told the Securities and Exchange Commission, SEC and Oando Plc to resolve all issues regarding an alleged N799 billion stakeholders’ liabilities with the oil firm.
The committee’s decision came against the backdrop of a petition forwarded by some aggrieved shareholders of the oil firm.
The petitioners claimed that the company has not been paying dividends to the shareholders since the 2013 financial year, adding that the “external auditor’s report reported ‘strong doubtful going concern’ over the group’s annual financial statement.”
According to the petition, “the group has negative working capital of over N263 billion consequence of current liabilities above, lighter than current assets, meaning that the management was unable to service its obligations financially.”
The petitioners also urged the leadership of the House to “as a matter of urgency save their investment in Oando Plc, look into these matters, cause an action to intervene in Oando plc by ordering/remove the present management, to vacate office, allowing for proper investigation of the corporate governance abuses, financial mismanagement as noticed in the published full-year audited financially statement.”