Following the directive by the Securities and Exchange Commission of Nigeria, that the Nigeria Stock Exchange should effect a full/technical suspension on the trading of the shares of Oando, the company has obtained an ex-parte order from the Federal High Court.
The Federal High Court injunction is to restrain the Nigeria Stock Exchange from carrying out the technical suspension of Oando Plc shares, and also restrain SEC Nigeria from also going ahead with the
a forensic audit on the operations of the company.
On October 18, 2017, the SEC issued a public notice stating that it had.
1) Issued a directive to the Nigerian Stock Exchange (NSE) for a full suspension in the trading of Oando shares for a period of forty-eight hours followed by a technical suspension until further directed.
2) Announced that a forensic audit into the affairs of the Company is conducted by a team of independent professional firms.
Oando is of the view that the SEC’s directives are illegal, invalid and calculated to prejudice the business of the Company. The Company being dissatisfied with the above-mentioned actions and to safeguard the interests of the Company and its shareholders immediately took steps to file an action against the SEC and the NSE.
On Monday, October 23, 2017, the Company obtained an ex-parte order from the Federal High Court (FHC) granting an interim injunction, as follows:
1) An order restraining the NSE and any other party working on their behalf from giving effect to the directive of the SEC to implement a technical suspension of the shares of the Company pending the hearing and determination of the motion for an injunction.
2) An order restraining the SEC and any other parties claiming through or working on behalf of the Commission from conducting any forensic audit into the affairs of the Company pending the hearing and determination of the motion for the injunction.
The NSE and SEC were served with the enrolled court order on Tuesday, October 24, 2017, after the technical suspension was carried out by the NSE on Monday, October 23, 2017.
The Chairman, Oando Plc and Alake of Egbaland, Oba Adedotun Gbadebo, has alleged bias and lack of adherence to due process in the way and manner in which the Securities and Exchange Commission has conducted its investigation of the allegations levelled against the company.
Oba Gbadebo communicated his reservation in a letter sent to the Director – General of SEC, Mounir Gwarzo.
According to Oando in one of its response to SEC allegations, the chairman asked to be granted an audience to present the company’s case, but the request was denied by SEC repeatedly, while the regulator has granted an audience to Ansbury Inc and gone so far as to offer what is tantamount to legal advice to them.
Oando stated, “The most recent action taken by the regulator confirms that the commission appears to be working to its own conclusion rather than looking at the facts before it, and acting in the best interests of the company and the minority shareholders whom it claims it seeks to protect.
“To fortify the company’s strong reservations with the SEC’s findings, a second statement was issued. The statement outlined all of the alleged infractions identified by the SEC and details the company’s position, for the most part disagreeing with SEC’s pronouncements.
Oando went so far as to highlight the prescribed penalties as set out by the regulators for the said infractions, none of which singularly or together warrant the institution of a forensic audit, full or technical suspension of trading of the company ’s shares on the Nigerian Stock Exchange.
The company added that it did not believe that the SEC had presented a strong enough case to support the engagement of a forensic auditor to conduct a forensic audit into the company’ s affairs while highlighting reasons to support the belief.
The reasons include “the SEC requesting a forensic audit in order to investigate whether its findings are true, which is a clear contradiction. How did the SEC arrive at its findings if it cannot be sure of the veracity of those findings, and, more importantly, how did it ascribe the appropriate level of weight to be given to those findings, enough to warrant an immediate suspension followed by a technical suspension of the shares of the company, especially if those findings are still mere allegations at this point, as the commission has clearly communicated.”
In a letter from the SEC, the commission informed Oando that the N160m cost of the forensic audit would be borne by the company, to which Oando responded by saying that:
“This must be an error in light of all its submissions to date, and not the best use of shareholder funds at this time.”
Oando highlighted that in the letter sent to it by the SEC, both the petitioners were copied, Alhaji Mangal and Ansbury Inc.
Accentuating that “the company has rightly stated that it is unheard of and detrimental for petitioners to be copied on correspondence to the investigated party on findings yet to be concluded”.
It is unclear how the SEC will respond to the allegations against it on the basis of bias.
One thing that is evident is that Oando has taken a different and bold stance to challenge the commission.