Following what can now be termed the longest forensic audit in the history of the Nigerian Securities & Exchange Commission (SEC) they published far reaching pronouncements and sanctions against Oando PLC’s principals said to be the outcome of the investigation into the company’s business. SEC published their findings and sanctions on the afternoon of Friday 31st May, Oando immediately came out, righteously angry at the fact that SECs actions were made public on their website before the company received a formal letter on evening of the same day.
Shareholders that we have spoken to, said they didn’t hear the news until Saturday when some newspapers carried the story. They said just as they were reconciling themselves with what this news means for the company and its shareholders, they received text messages on Sunday 2nd June stating that the SEC had dissolved the management team led by Wale Tinubu and put in place an interim management team led by Mutiu Sunmonu. The next day Monday, they were getting calls with regards to police storming Oando’s head office and driving staff out and then ending the day with news that Oando’s principals had received an injunction barring the SEC and its agencies from executing the directives in the SEC letter dated 31st May.
Speaking on behalf of the Sokoto Shareholders, Alhaji Kabiru Tambari said: We are not happy at all with has happened. Wale Tinubu and his management team have suffered, they have put their resources; energy, time; to keep this company moving forward and now the SEC wants to take it away from not just them but us the shareholders as well. When the company was making losses the SEC didn’t bring up all these infractions and sanctions, but now the company is doing well, and has returned to profit and they’ve come with such drastic actions. This will foil the company’s attempt to pay us dividend at the end of the year.
It is clear that the SEC wants to kill the company. How else do you explain an action such as this that defies logic? We the shareholders, who the SEC are meant to be protecting are not satisfied with the way this has been handled They should think of the effect their actions will have on the market, if this continues, the company will not be able to pay salaries, the shares will be devalued badly leaving us in a precarious position. We implore the Court to look into the matter carefully and adjudicate accordingly.”
The sanctions which has led to non-stop conversations on social media over the past few days has brought to the fore inconsistencies in the SEC’s process. One twitter user Yinka Ogunnubi tweeted: I think it’s time we start asking ourselves some very important questions; does the SEC have the powers to remove Directors of a listed Company? Does the SEC which doesn’t have a Board have the locus standing to take actions against a listed company based on corporate governance issues?
The actions of SEC will cause a loss of confidence in the capital market and endanger FDI into the country, a recent Forbes publication titled; “Nigeria has become Africa’s Money-Losing Machine” further shows how drastic actions such as those taken by regulators, deter Foreign Direct Investment (FDIs) into the country. According to the article written by Kenneth Rapoza; “Despite sitting on nearly 40 billion barrels of proven oil reserves and over $48 billion worth of investment opportunities in the oil and gas sector, Africa’s largest economy is mired in problems. Nigeria’s stock index is down 0.4% year-to-date while emerging markets are up 2.3%.”
Speaking on Channels Television, Johnson Chukwu, CEO, Cowrie Asset Management said “For the past four years the SEC has not had a Board and the absence of an oversight body is a major constraint to a regulator like SEC. What they have done is tie their hands to the back; they are trying to correct and implement corporate governance in a company when they themselves do not have a corporate governance position or structure of their own, coupled with other internal issues that they have.”
According to the National Chairman, New Dimension Shareholder Association Mr. Patrick Ajudua: The SEC’s findings on Oando speak volumes. As shareholders of the company we are more interested in the protection of minority shareholders, the development and protection of the capital market. The consequences of these far reaching directives from the regulator will have an adverse effect on the share price of the company both locally and internationally, market integrity, rule of law and expected returns on investment. I believe that the SEC as presently constituted have no power to issue such far reaching directives without the consent of a Board. Disappointedly, the regulator have been operating without a Board for more than 4yrs and as such is like a car without a pilot, a human being with a body but no head. Even the USA SEC have not operated without a Board since 1939. The law setting up SEC is very clear on power, authority and function of an acting DG. Mary Uduk can’t arrogate power which was not conferred on her by the constitution. Therefore it is my submission without prejudice to the rights of Directors of Oando to seek judicial intervention that the SEC as a body have gone beyond the remit of their powers. I strongly support the steps taken by Oando in seeking legal redress and justice. SEC as the apex regulator of capital market must be seen to operate within the rule of law, you can’t beat a child and ask him not to cry. Efforts must be made to give the company the opportunity to defend the allegations and where they are found wanting necessary sanction can be made with human face as to err is human and to forgive is divine. Minority shareholders must not be made to suffer as a result of this unhealthy fight.”
The SEC’s action over the last few days have sparked outcry from concerned Nigerians. Atedo Peterside, a well renowned financial expert and banking industry mogul took to his Twitter account on the Saturday, June 1, 2019 to share his views on the Oando and SEC saga. He tweeted “On Oando, what I don’t understand is why the SEC would not give the findings of the Forensic Audit to Oando and give them an opportunity to defend themselves? The findings of the Forensic Audit should be made public alongside Oando’s responses so we can all judge for ourselves.”
In another reaction Gaby Ikeji (Esq.) said: “I have been following reactions regarding the Oando drama as entrepreneurs and upward mobile Nigerians, young and old, I am of the opinion that rather than vilify the management of Oando or mock their present trivial, we should empathize with them for what has befallen what was once a strong company started by three young chaps. I don’t care if they received patronage from any politician to get to where there are and my reason is simple, finding a thriving world class business in Nigeria without Government patronage is like looking for a pin in a hay stack. The whole episode is disturbing and demoralizing and I would encourage us to empathise with these guys until the truth is fully unraveled.”
Gaby recognized Oando’s impact on the society and asked a few pertinent questions “…considering the massive impact that Oando has on the corporate world, harnessing, nurturing and training young Nigerians into fine globally competitive individuals and supporting various professionals within the value chain of their business as well as displaying mind bugling appetite for risk and venture within the field of their endeavor, should this country not be weeping that the existence of our major brands are being threatened? Are we so engulfed with politics that we forget how much this company influenced our desire and drive for corporate excellence? Must all our stars become fallen hero?”