*Battles SEC, NSE over suspension of Shares
26 October 2017, Sweetcrude, Lagos — Oando Plc has said it will be responsible for payment of N160 million for the proposed forensic investigation by the Security Exchange Commission, SEC, into allegations brought against it by two of its shareholders, Alhaji Dahiru Mangal and Ansbury Inc.
The revelation was made in a statement released by the company’s Head, Corporate Communications, Alero Balogun while contesting suspension of its Shares from the stock market by SEC and the Nigerian Stock Exchange, NSE.
According to the statement, the company described the N160 million as “onerous, unnecessary and irresponsible”.
“The cost implication of the forensic audit (N160, 000,000.00) which is to be borne by the Company is onerous, unnecessary and irresponsible in light of the above submissions and not the best use of shareholder funds at this time”, the statement read.
Oando said it does not agree with the suspension of its Shares by the Nigerian Stock Exchange, NSE and the Security and Exchange Commission, SEC.
The company’s reaction comes one week after SEC issued a public notice on first, full suspension of its shares from the stock market, followed by a technical suspension.
The statement said SEC and NSE having declared to the public that it acted drastically to suspend its shares due to its “weighty” findings in the course of its investigations, it was contradictory for SEC to have concluded that a forensic audit is necessary in order to still investigate whether its findings were true.
“How did the SEC arrive at its findings if it cannot be sure of the veracity or otherwise of those findings and how did it ascribe the appropriate level of weight to be given to those findings, enough to warrant an immediate suspension followed by a technical suspension of the shares of the Company, if those findings are still mere allegations at this point”, the statement read.
Again, the company said it had fully co-operated with the SEC since the commencement of the investigation in May 2017 and provided all information requested.
“It is evident that submissions made to the SEC have not been duly considered due to the conclusions reached and actions taken, as all of the matters raised have been responded to in great detail with all supporting documents requested by the SEC”.
The company alleged that although it had repeatedly, through its chairman, Wale Tinubu requested an audience with the SEC to enable it present its case before the Commission but “to date, no invitation has been extended to the company”.
According to Oando, each of the alleged infractions has a penalty as prescribed by the respective “provisions of the ISA, SEC Code, SEC Rules and Regulations, NSE Listing Rules and CAMA”, adding that none of them whether singularly or together, warranted the suspension of free trading in the securities of the company or the institution of a forensic audit.
“The latest actions taken by the SEC are prejudicial to the business of the Company as it would hinder the ability of the Company to enter into new business transactions and affect the confidence that existing stakeholders (lenders, JV Partners, Vendors etc.) have in transacting business with the Company”.
The statement said the company had received numerous queries from critical stakeholders, including its lenders as a result of the SEC’s actions and an indefinite technical suspension of its shares, saying that an open-ended forensic audit will negatively impact the ability of the company to conduct its day-to-day business and meet the expectations of all its stakeholders.
“By two letters dated August 24th and August 28th, the Chairman of Oando petitioned the DG of the SEC alleging bias and lack of due process in the way and manner in which the SEC has conducted this investigation. The current action by the SEC, despite its internal findings, confirms that the SEC appears to be working to its own conclusion rather than looking at the facts before it and acting in the best interest of the Company and the minority shareholders whom it claims it seeks to protect”.
“In its most recent communication to the Group Chief Executive (GCE) dated October 17, 2017, the SEC unilaterally qualified one of the petitioners, Ansbury Inc. as a Whistleblower despite the fact that Ansbury brought its petition to the SEC as an indirect “shareholder” of the Company”.
“The Company has from the date of its earliest communication to the SEC on this matter, challenged both the legal capacity of Ansbury to bring a petition against the Company and the SEC’s jurisdiction to consider the petition. This is because, Ansbury is not in fact a shareholder of the Company and furthermore, there is an on-going arbitration in the United Kingdom in respect of its indirect investment in the Company”.
“Under the SEC’s Complaints Management Framework it shall not consider any matter which is currently in arbitration. The unilateral and arbitrary re-classification by the SEC of the basis upon which Ansbury wrote its petition at this late stage is at odds with accepted principles of fairness and due process”.
“It is also difficult to understand how Ansbury can be a whistleblower when the information and allegations contained in its petition were obtained from the publicly disclosed 2016 Audited Financial Statements of Oando and based on Ansbury’s own interpretation of those financial statements”.
The statement revealed that the two petitioners, Alhaji Dahiru Mangal and Ansbury Inc. were copied on the SEC’s most recent communication to the company’s GCE on October 17, 2017.
“It is unheard of and prejudicial to our case for petitioners to be copied on correspondence to the investigated party on findings yet to be concluded. Throughout this investigation, at no point has the SEC copied the Company in its correspondence to the petitioners”.
“We are concerned that the petitioners have been given undue access to what ought to be strictly confidential information between ourselves and the SEC to the detriment of the Company”.
Oando then said that the SEC did not present a strong case to support either the directive to suspend free trading in the shares of the company or the engagement of a forensic auditor into the affairs of the company.
On October 18, the SEC issued a public notice that it had issued a directive to the NSE for a full suspension in the trading of Oando shares for a period of forty-eight hours followed by a technical suspension until further directed.
SEC also announced that a forensic audit into the affairs of the company will be conducted by a team of independent professional firms.
“Oando is of the view that the SEC’s directives are illegal, invalid and calculated to prejudice the business of the Company. The Company being dissatisfied with the above mentioned actions and to safeguard the interests of the Company and its shareholders immediately took steps to file an action against the SEC and the NSE”.
Oando added that on Monday October 23, it obtained an ex-parte order from the Federal High Court, FHC, granting an interim injunction, restraining the NSE and any other party working on their behalf from giving effect to the directive of the SEC to implement a technical suspension of the shares of the company pending the hearing and determination of the motion for injunction.
It also said it got an order restraining the SEC and any other parties claiming through or working on behalf of the commission, from conducting any forensic audit into the affairs of the company pending the hearing and determination of the motion for injunction.
“The NSE and SEC were served with the enrolled court order today Tuesday, October 24, 2017 after the technical suspension was carried out by the NSE on Monday, October 23, 2017. In our view both the NSE and the SEC are legally obliged to comply with the interim orders pending the substantive determination of the suit”.