This is obviously, not the best time for Wale Tinubu, the CEO of Oando group and its management as the Securities & Exchange Commission (SEC) on Wednesday directed the Nigerian Stock Exchange (NSE) to place the shares of Oando Plc on a full suspension for 48 hours, effective Wednesday, and technical suspension from Friday, October 20, 2017.
It is believed that the regulatory body wants to conduct a forensic audit into the affairs of Oando Plc following two petitions from Alhaji Dahiru Barau Mangal and Ansbury Incorporated. The petitioners alleged that there were various financial mismanagements going on in the company. According to them, the Wale Tinubu led management of Oando Group is being mismanaged.
Earlier before this move, Mr. Gabriele Volpi of Ansbury Incorporated had requested that SEC should stop Oando from holding its Annual General Meeting (AGM) that was held on September 11, 2017.
Before this, Ansbury Incorporated had also alleged the Oando management of serious financial abuse, and gross abuse of corporate governance tenets in its running of the company
Not only that, the petitioner also sought the removal of Tinubu and Omomofe Boyo as the Group CEO and Deputy Group CEO, respectively, of the company so as to save it from going under.
On Wednesday, October 18, the regulatory body for the capital market, SEC explained in a statement that it carried out a comprehensive review of the petitions and found: a breach of the provisions of the Investments & Securities Act 2007; breach of the SEC Code of Corporate Governance for Public Companies; suspected insider dealing; suspected related party transactions not conducted at arm’s length and discrepancies in the shareholding structure of Oando Plc, among others.
In view of these weighty allegations, the capital regulator said: “The commission’s primary role as apex regulator of the Nigerian capital market is to regulate the market and protect the investing public. 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.
“To ensure the independence and transparency of the exercise, the forensic audit shall be conducted by a consortium of experts made up of auditors, lawyers, stockbrokers and registrars.”
SEC explained that to further ensure that the interest of all shareholders of Oando Plc are preserved during the course of the exercise, it directed the NSE to place the shares of Oando Plc on technical suspension.
Due to SEC’s directive, Oando Plc shares will not be traded between 18th and 19th October, while from Friday, 20th October trading will be without movement in the share price (which is technical suspension).
“However, in view of the fact that it is not technologically feasible for the exchange to effect a technical suspension except after 48 hours, the Commission directed as follows. Effective for 48 hours from today, 18 October 2017 to 20 October 2017, the NSE should implement a full suspension in the trading of the shares of Oando Plc and effective from 20 October 2017 and until further directive, the exchange should implement a technical suspension in the shares of Oando Plc.”
The shares of Oando Plc closed at N5.99 on Tuesday. The stock had hit a year high of N9.57 before the negative reactions from investors over the petitions led to fall in the price to the current level.
