Oando’s share price drops 10% on news of regulatory investigation

Shares in Nigerian oil company Oando fell close to a one-month low on Monday on news that regulators were investigating the firm’s shareholding structure following its $1.65 billion acquisition of ConocoPhillips’ Nigerian business.
Shares in Oando, which are also listed in Johannesburg and Toronto, fell 9.54 percent in Lagos, down for the second session in a row, to a level last seen in June.
“Our attention has been drawn to a report … stating that Oando is under investigation by the Securities and Exchange Commission (SEC) following petitions filed by some foreign investors in Oando Nigeria Plc, in relation (to) shareholding structure,” it said in a statement.
Oando acquired ConocoPhillips’s Nigerian business in 2014 aimed at moving the business upstream into oil exploration and production from being a petroleum products retailer. But high financing costs coupled with lower oil prices have hit profits, analysts say.
The company said it was aware that the regulator was in receipt of a petition but that the claims were “unsubstantiated, misleading and defamatory” and that it had received board, shareholder and where required SEC approval on the matter.
It added that the company was cooperating with the SEC.

Credit: Reuters