- SEC says Oando declared dividends from unrealised profits, released false financial statements
Oando Plc has obtained an ex-parte order from the Federal High Court restraining the Nigerian Stock Exchange (NSE) from implementing a technical suspension on its shares.
The company’s Head, Corporate Affairs, Alero Balogun, said on Tuesday that the ex-parte order was obtained on October 23.
Balogun said the order also restrained the Securities and Exchange Commission (SEC) from conducting any forensic audit into the company’s affairs pending the hearing and determination of the matter.
He said: “We are of the view that the SEC’s directives are illegal, invalid and calculated to prejudice the business of the company.”
Balogun added that the company was dissatisfied with the most recent actions taken by the SEC and to safeguard its interest and that of its shareholders immediately took steps to file an action with the Federal High Court against the SEC and the NSE.
The statement said the NSE and SEC were served with the court order on October 24, noting that they were legally obliged to comply with the interim orders pending the substantive determination of the suit.
The statement further said that the company had raised questions as to why the commission had investigated a petition brought by an indirect shareholder (Ansbury Inc.) domiciled outside Nigeria, in a jurisdiction outside its purview.
According to the statement, the SEC’s Complaints Management Framework has said it shall not consider any matter which is currently in arbitration.
The statement reads further: “In a recent letter to Oando, the SEC re-categorised the petitioner as a ‘whistle blower’ contrary to its former position as a ‘shareholder’.
“This according to Oando, shows a clear bias as it suggests the SEC re-categorised the petitioner’s position to ensure it is able to carry on investigating the petitions.”
According to the statement, the most recent action taken by the regulator confirms that the commission appears to be working to its own conclusion rather than looking at the facts before it.
SEC on October 18 directed the exchange to place the shares of Oando on technical suspension with effect from October 20 following two petitions by Alhaji Dahiru Barau Mangal and Ansbury Incorporated pending the outcome of a forensic audit.
The commission in a circular said it carried out a comprehensive review of the petitions and made the following findings amongst others: breach of the provisions of the Investments & Securities Act 2007.
It said that the company also breached SEC Code of Corporate Governance for Public Companies, suspected insider dealing related party transactions not conducted at arm’s length and discrepancies in the shareholding structure of Oando.
In a related development, SEC has accused the company of declaring dividends from unrealised profits and releasing false financial statements to the public before it was suspended by the Nigerian Stock Exchange, a correspondence sent to the oil firm and obtained by PREMIUM TIMES has revealed.
The position of SEC was conveyed to Oando before it was suspended from the Nigeria Stock Exchange based on the directive of the SEC on October 19.
The company was subsequently suspended from the Johannesburg Stock Exchange.
In the letter obtained by PREMIUM TIMES, which was sent to the Group Chief Executive Officer of Oando, Wale Tinubu, SEC said it found the oil firm’s 2014 Rights Issue Circular “contained misleading information”.
The letter was dated October 17 and signed by Braimoh Anastasia, the Head of Legal Department of SEC.