SEC speaks on court order nullifying Oando’s AGM ban

The Securities and Exchange Commission (SEC) says it will challenge a court decision that declared its sanctions against Oando Plc “unlawful”.

The commission said it was not in the know of the Abuja High Court order, lifting its ban on oil driller Oando Plc’s right to conduct Annual General Meeting (AGM) more than 20 months after the regulator blocked the privilege.

“The attention of the Securities and Exchange Commission (the commission) has been drawn to several publications in the media, where it is reported that a shareholder of Oando Plc, purportedly obtained a judgement from the Federal Capital Territory High Court against the commission,” Abuja-based SEC said in a statement Wednesday.

It informed “the general public that it was never at any time served with court processes with respect to the purported matter at the FCT High court.”

“The commission will consequently take all necessary steps to verify and set aside the purported decision of the said court,” SEC said, however.

The court granted reliefs sought by an Oando shareholder, Patrick Ajudua, who challenged SEC’s embargo on the energy firm’s AGM since June 2019. Mr Ajudua argued that the decision breached his right to freedom of association.

Justice O.A. Musa granted the plaintiff’s prayer after Mr Ajudua invoked Section 40 of the Nigerian Constitution as well as articles 9,10 & 11 of the African Charter on Human and Peoples Rights to draw support for his claim to free association right.

On Wednesday, the news pushed shares in Oando up by as much as 10 per cent to N3.41 per unit, the maximum daily gain limit permitted by the Nigerian Stock Exchange (NSE).

Oando, dual-listed in Lagos and Johannesburg, came into the eye of the storm in 2019 when auditors from Ernst and Young said its chances of continuous survival as a corporate entity were under threat although it posted a profit jump the preceding year.

Post-tax profit climbed to N28.8 billion by almost half but Ernst and Young noted “the company recorded comprehensive losses for the year of 18.3 billion naira and, as that date, current liabilities exceeded current assets by 63 billion naira,” in Oando’s earnings report for 2019.

“A material uncertainty exists that may cast significant doubt on the company and the group’s ability to continue as a going concern,” the auditing firm concluded.

The purchase of an oil and gas facility from Houston-based hydrocarbon explorer ConocoPhillips catapulted Oando’s debt to $2.5 billion.

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An inquiry into a heated shareholder wrangle by SEC and NSE following an allegation of insider dealing complicated matters for a company, whose board had been indicted for corporate governance lapses, internal control failure, management compromise and oversight abuse in a separate forensic audit conducted by Deloitte & Touche LLP.

That caused the regulator to ban Chief Executive Wale Tinubu and his deputy, Mofe Boyo, from the boards of public companies for five years.

Both Mr Tinubu and Mr Boyo were compelled by the London Court of International Arbitration a year earlier to pay $680 million to Ansbury Investment Inc as settlement for a financial management and shareholding dispute in Oando.
Oando’s shares closed in Lagos on Thursday at N3.35 per unit.