Page 8 - AfrOil Week 23

AfrOil PERfoRManCE AfrOil
Oando squares off with SEC
nigERia
NIGERIA’S Securities and Exchange Commis- sion (SEC) has been forced to defend its actions against Oando Group – removing the board and ordering cash to be paid back – as the company has dug in.
On June 3, Oando said the Federal High Court of Lagos had issued an injunction restraining the SEC from barring two of its exec- utives, Jubril Adewale Tinubu and Omamofe Boyo, from serving on a board for ve years and the issue of a 91.13 million naira (US$253,000) ne. Tinubu and Boyo are the group CEO and deputy group CEO respectively. e SEC, on May 31, had said they would both be suspended from serving as directors of public companies for ve years.
e court also prevented Mutiu Sunmonu from acting as Oando’s interim head – the SEC had appointed the former head of Shell Petro- leum Development Co. (SPDC) to bring in a new team at the company.
The injunction said the status quo should be continued until a motion on the notice can be determined. The case has been adjourned until June 14, is Day reported. Despite the court injunction, policemen seized Oando’s headquarters.
The SEC, on June 9, was forced to issue a statement protesting that it was a law-abiding agency and that it was following due process.
Discussions between the SEC and Oando have been going on for some time, including a letter dated July 2017 to the company’s CEO. A forensic audit was carried out, by Deloitte & Touche, during which Oando’s managers were given a number of opportunities to provide explanations of issues arising.
“ e responses given by Oando, were how- ever considered unsatisfactory”, said the SEC. is led to its decision “to penalise the company and some of the individuals related to it for vio- lations of securities laws”.
It went on to note that its activities have been set out in the court hearing in Lagos. Removing the directors, and appointing an interim team, was intended “to protect investors and preserve stakeholder value”. e agency had earlier said a number of “serious infractions” had been discov- ered at Oando. ese included: “false disclosures, market abuses, misstatements in nancial state- ments, internal control failures, and corporate governance lapses stemming from poor board oversight, irregular approval of directors’ remu- neration, unjusti ed disbursements to directors and management of the company [and] related party transactions not conducted at arm’s length, amongst others.”
HigH PowER:
oando’s ceo, wale Tinubu, is the nephew of chief bola Tinubu, who is the leader of the ruling all Progressives congress (aPc), who has been discussed as a potential contender for the presidency in 2023.
Oando has denied these accusations. All pay- ments were cleared by the proper authorities, it said, and regular meetings were held with audi- tors, it said. Furthermore, it complained that the complaint about related party transactions had not been demonstrated.
e SEC also singled out the sale of an Oando subsidiary in 2013, to Green Park Management, as being “ ctitious”. is sale, it alleged, allowed Oando to wrongly declare a pro t for the year and pay dividends. Oando also denied this.
Changing the guard
While Oando’s managers are taking a tough line, the resignation of two of its non-executive direc- tors, Chief Sena Anthony and Oghogho Akpata, was announced on June 7. e SEC had threat- ened that anyone sitting on the board who con- tinued in their position was liable to be barred from sitting as a director for ve years.
Oando had been due to hold its AGM on June 11 but this has been suspended, the SEC said.
is is not the rst time that Oando and the SEC have clashed. e agency’s former direc- tor general, Mounir Gwarzo, was suspended in November 2017, amid allegations of nancial misappropriation. At the time, the SEC was investigating Oando and Gwarzo’s suspension was seen as linked.
Gwarzo was acquitted in April and, in May, an industrial court ruled he should be readmit- ted to his post at the SEC.
the run up
Scrutiny of Oando, by the SEC, began in April 2017 when a company, Ansbury Investments, and Dahiru Mangal, complained to the agency about equity holdings. Mangal’s complaint was settled, but Ansbury – linked to Gabriele Volpi – pressed ahead with its complaints.
e case went to the London Court of Arbi- tration (LCIA), which ultimately ruled that Ocean Oil and Development Partners (OODP) BVI – a partial owner of Oando – owed Ansbury US$600 million. According to is Day, Volpi is planning to use his stake in Oando to choose a new management team.™
Wale Tinubu
Source: Oando
P8
w w w . N E W S B A S E . c o m Week 23 11•June•2019