Oando Plc. led by Wale Tinubu has been indicted by Securities and Exchange Commission (SEC) on investigation carried out on the company’s affairs over petitions filed against the energy firm alleging gross financial misconduct.
In a letter dated October 17, 2017 titled: “Re-Serious Concern To Corporate Governance Existence, Gross Abuse of Corporate Governance And Financial Mismanagement In Oando Plc” sent to Mr. Adewale Tinubu, Group Chief Executive Officer of Oando Plc, SEC said Oando Plc violated different laid down rules and even misinformed the investing public on its actions.
Mr. Adewale Tinubu, Group Chief Executive Officer of Oando Plc
The letter, signed on behalf of the Director-General of SEC, Mr Mounir Gwarzo, by the Head of Legal Department at the agency, Mrs Braimoh Anastasia, said: “Following the structuring of the OEPL transaction in contravention of the ISA 2007, Oando Plc recorded a profit of about N6 billion from the sale of OEPL that erased the operating loss of N4.68 billion leading to a profit of N1.4 billion for the year 2013.”
“The company subsequently declared dividends from the profit. Having admitted that the action was in breach of the ISA 2007, Oando Plc restated its 2013 & 2014 Audited Financial Statements which contained material false and misleading information contrary to Section 60(2) of the ISA 2007.”
“The 2014 Rights Issue Circular of Oando Plc contained information relating to the profit reported by Oando Plc in 2013 arising from the sale of OEPL. Consequently, the said Rights issue circular contained material misleading information. This action amounts to a violation as contained in Section 85(1), 86(1) and 87(1) of the ISA 2007.”
“Oando breached its Rules and Regulations on Payment of Dividends by remitting in 2014, dividends to the Registrar in piecemeal in violation of Rule 44 (1) of the SEC Rules and Regulations.”
“The Commission notes the Report of the Independent Auditors of Oando Plc, Ernst & Young, which is contained on Pages 63-68 of the 2016 Annual Reports & Accounts of Oando Plc, more particularly in Paragraph 1 of Page 64 where the independent auditors reported the going concern status of the Company.”
“The Commission observed that certain persons classified as insiders within the provisions of Section 315 of The Investment and Securities Act (ISA), 2007 and who were in possession of confidential price sensitive information not generally available to the public, had between January-October 2015 traded on Oando Plc shares prior to the release of the company’s 2Ol4 Financial Statement, where the company reported a loss of N183 billion.”
“On the allegation of insider dealing made by Oando Plc against Alhaji Dahiru Mangal, although investigation was initiated by the Commission, the attention of the Commission was drawn to a letter dated September 21, 2017 from Oando Plc, informing it that a suit had been filed in court in that regard, and that the matter was now sub-judice.”
“The Commission identified certain related party transactions and observed that they were not conducted on arm‘s length.”
“The Committee noted that Oando Plc declared dividends in 2013 and 20l4 from unrealized profits. The Commission observed discrepancies in the shareholding structure of Oando Plc. While Alhaji Mangal’s status as a shareholder in Oando Plc is not in contention or dispute, the exact units of shares held by him requires reconciliation.”
“The Commission‘s primary role as the apex regulator of The Nigerian capital market is to regulate market participants and protect the investing public. The Commission notes that the above findings are weighty and therefore needs to be further investigated to ascertain their veracity or otherwise.”
“After due consideration, the Commission believes that the engagement of a Forensic Auditor to conduct a forensic audit info the affairs of Oando Plc has become necessary. This is pursuant to the statutory duty of the Commission enshrined in Section T3 (k) and (r) of The ISA 2007.”
“To ensure the independence and transparency of the exercise, the forensic audit shall be conducted by a consortium of experts, the consortium is composed of the following institutions: Akintola Willians Deloitte (Team Lead); United Securities Limited; SPA Ajibade & Co; TJADAP Consulting & Associates; and Nasir Muhammad & Co. The cost implication of the exercise is N160 million and shall be borne by Oando Plc.”
“To ensure that the interest of all shareholders, especially the minority shareholders of Oando Plc are preserved during the course of the exercise, the Commission hereby places the shares of Oando Plc on Technical Suspension. The Commission expects Oando Plc to give all the necessary support and co-operation to ensure the success of the forensic audit.”
“Please accept the assurances of the Director General’s highest regards.”