Nigeria’s Oando has addressed all the issues raised by a key shareholder, Dahiru Mangal, and will consider a board appointment for him or a representative, the oil company said on Monday.
Oando has been in a drawn-out conflict with Mangal, who petitioned Nigeria’s Securities and Exchange Commission (SEC) last year, alleging financial mismanagement at the firm.
The SEC has ordered a forensic audit into the oil company’s shareholding structure citing concerns about possible insider trading.
The conflict also led to the suspension of Oando’s shares on the Lagos and Johannesburg stock exchanges. They have been suspended at 5.99 naira each for more than three months.
“Oando’s board of directors will consider the appointment of representation for … Mangal to the board. The representation will take the form of directorship from qualified individuals nominated by … Mangal,” Oando said in a statement.
Oando said Mangal has officially notified the company that he is a substantial shareholder, owning more than 10 percent of the firm’s shares.
The oil company said it was open to shareholder oversight and would encourage Mangal to exercise his rights in order to better understand the company’s business. It added that the Emir of Kano mediated the conflict resolution, which ended on Jan. 7.
The Emir of Kano, Muhammadu Sanusi II, a former central bank governor, is a highly respected religious leader in northern Nigeria who has been vocal on government policy and corruption.
“Following the clarification I have received from Oando’s management team, I have withdrawn my petition to the SEC,” Mangal said in an Oando statement.
“I am confident in the company’s leadership team and trust that with the right support it will continue to grow from strength to strength, returning real value to all its shareholders including my good self.”
In October, the SEC said it had carried out a comprehensive review of Oando after it received two petitions and found related party transactions were not conducted at arm’s length and that there were discrepancies in its ownership structure.
The SEC has said a team of auditors, lawyers, stockbrokers and share registrars would conduct a forensic audit on Oando to ensure independence.
A company source told Reuters last year the petitions centred around the ownership of some Oando shares bought through an investment vehicle at the time the company bought ConocoPhillips’ Nigerian business for $1.65 billion in 2014.
Oando bought ConocoPhillips’s Nigerian business in a bid to add oil exploration and production to its petroleum product retailing businesses. But high financing costs coupled with lower oil prices hit profits.