The Nation Newspaper

Tag: SEC

  • Absence of board grounds SEC

    • Corporate governance threatened.

    THE Securities and Exchange Commission (SEC) is operating at a skeletal level due to the absence of a board.

    SEC has been without a board since 2015, after the President Muhammadu Buhari-led administration dissolved the existing one then.

    Stakeholders and staff members of the Commission at the weekend said SEC had not been able to effectively discharge its mandate due to the lack of a board.

    The Investment and Securities Act (ISA) designates the board of SEC as the main organ for the administration of the commission.

    Some stakeholders who spoke under the condition of anonymity said the inability of the government to constitute a board for SEC for three years has exposed the capital market to ridicule and poor corporate governance.

    “There is nowhere in the ISA where anyone is substituted to perform the role of the board of SEC. There is no way any other government agency or minister or whosoever can replace the board. It has exposed the frailties of the capital market regulation. So, what’s all this talk about corporate governance when the apex regulator is not running on same level. You hardly can give what you don’t have,” one of the stakeholders said.

    The ISA stipulates the composition of a board for SEC, which shall include a part-time chairman, the director-general and chief executive as accounting officer, three full time commissioners, a representative of the Federal Ministry of Finance, a representative of the Central Bank of Nigeria, and two part-time commissioners one of whom shall be a legal practitioner qualified to practice in Nigeria with ten years post call experience.

    The ISA vested the board of SEC with the mandate for “general administration of the commission”, which, particularly, include to formulate policies for the regulation and development of the capital market and the achievement and exercise of the functions of the commission, approve the audited and management accounts of the commission and appoint Auditors for the commission.

    Also, the board is statutorily responsible for consideration and approval of the yearly budget of the commission as may be presented to it by the management, establishment of zonal offices of the commission and sundry activities as necessary and expedient for the purposes of achieving the objectives of the commission.

    Besides, the board is empowered, on the recommendation of the director-general (DG), to approve the duties of the full time commissioners and the reassignment of the full time commissioners by the DG.

    The tenure of the board is four years, though the DG and full-time commissioners may be reappointed for another second and final term of four years. While the ISA provides for extension of the tenure of the DG and “any of the Commissioners whose term of office has expired until a successor to such Director-General or Commissioner is appointed”, the law does not make any adhoc provision for the board as a whole.

    “It falls far short of good corporate governance for SEC not to have a board for this long, it turns the Director-General into a sole administrator, it does not augur well,” Adebayo Adeleke, former General Secretary of Independent Shareholders Association of Nigeria (ISAN), Nigeria’s frontline shareholders’ association, said.

    Under the law, in the absence of the DG or, one of the commissioners will be nominated by the DG to run the daily management and administration of the commission and such a commissioner shall be answerable to the board of the commission.

    According to the ISA, meetings of the board of the Commission shall take place as often as may be required, but not less than four times in any financial year of the commission.

    The board is responsible for the financial management of the commission. The ISA requires that the board shall cause to be prepared an estimate of the income and expenditure of the commission during the next succeeding year and when prepared, they shall be submitted to the Minister and the National Assembly.

    “The Commission shall cause to be kept, proper books of records and accounts which shall be audited by auditors appointed by the board of the Commission,” ISA stated.

    ISA requires SEC, not later than three months after the end of each year, to submit to the Minister and the National Assembly, a report on the activities and administration of the commission during the immediately preceding year and, shall include in such reports, audited accounts of the commission and the report of the auditor on the accounts.

    A staff member of the Commission noted that the suspension of the DG had worsened the uncertainties at the commission, citing the disruptions to the activities, including the quarterly Capital Market Committee (CMC) meeting, during which SEC usually leads all capital market stakeholders to chart the way for the market.

     

  • Ortom to attend SEC tomorrow

    Ortom to attend SEC tomorrow

    Benue State Governor Samuel Ortom and his deputy Benson Abounu will attend the State Executive Council (SEC) meeting of the All Progressive Congress (APC) tomorrow.

    The meeting is scheduled to hold at the party’s secretariat on Iyorchia Ayu road, Makurdi.

    Ortom will brief members ahead of the 2019 party activities.

    According to the state chairman, Comrade Abba Yaro, the meeting is also an opportunity for the governor to inform SEC that he is still in APC and will seek re-election on its platform.

    There have been rumours that Ortom may dump the party following massive killings in the state.

     

  • SEC to extend deadline for e-dividend

    SEC to extend deadline for e-dividend

    Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC) may today announce the extension of the deadline for the registration for the electronic dividend (e-dividend) payment system, providing opportunity for a large number of shareholders to register.

    SEC had extended the initial December 31, 2017 deadline to February 28, 2018 to encourage shareholders to embrace the initiative. However, the larger number of shareholders has not been able to register due mainly to poor harmonisation by registrars and low level of awareness.

    Sources in the know told The Nation yesterday that authorities at the apex capital market regulator have decided to extend the deadline in order to give room for shareholders to cross over to the new payment system.

    Many shareholders’ leaders had called for extension of the deadline, citing the need for an inclusive approach and mass mobilization for the success of the scheme.

    Stakeholders who spoke with The Nation were unanimous that SEC needs to improve on its sensitization and awareness programmes beyond the cities to cover the nooks and crannies of the country.

    According to them, there is the need to deepen the mobilization and awareness function of SEC as a core driver to encourage Nigerians to embrace the capital market. Less than seven per cent of Nigerian population is participating in the capital market.

    President, Association for the Advancement of Rights of Nigerian Shareholders (AARNS), Dr Faruk Umar said the e-dividend initiative is a commendable initiative that should be embraced by all shareholders, noting that direct payment of dividends will be beneficial to all stakeholders.

    He however called for extension of the deadline till the end of this year to ensure that more shareholders are captured under the scheme.

    “The e-dividend project has been very successful as all one needs to do is to walk into a bank and complete the form. With regard to the deadline, I think SEC should extend it to December 31, 2018, but shareholders may be asked to bear the cost,” Umar said.

    He noted that the cessation of dividend warrants and full commencement of e-dividend will help to address many issues that had bedeviled the dividend payment in the past including stealing of dividend warrants, delayed payment, problem of revalidation of warrants and the huge costs being paid by companies to process and post dividend warrants.

    Shareholder Activist and Co-Founder, Nigeria Shareholders Solidarity Association (NSSA), Alhaji Gbadebo Olatokunbo said SEC should reconsider the deadline and allow investors to continue to register without any hindrance.

    “SEC setting deadline on the right of investors was misdirection, because no rule can deny investors the returns on their investments.

    He noted that registrars were the major culprits hindering the success of the e-dividend scheme as they have perfected ways of engaging in selective execution of mandated accounts.

    “The registrars were in the habit of selective execution of mandated accounts, discriminating against stocks bought through Nigerian Stock Exchange (NSE). They will never treat such mandated-form despite due process on the account if the stocks were acquired through the secondary market. It will not be treated like that of primary offer and you have to get back to your stockbrokers for some documentation before it could be accepted unto the e-dividend scheme,” Olatokunbo.

    According to him, SEC should direct registrars to use shareholders’ Bank Verification Number (BVN) for e-dividend processing rather than the recourse to the archaic requests for signature verification and multiple processes.

    Former General Secretary, Independent Shareholders Association of Nigeria (ISAN), Mr. Adebayo Adeleke, noted that adoption of technology and automation of the processes at the Nigerian capital market would bring the Nigerian market at par with other advanced markets.

    According to him, the world is now technology-driven and Nigeria has to move with the time.

    “SEC must endeavour to reach and enlighten all shareholders, not only in Lagos and other cities, but also in nooks and crannies of the country. I doubt if that has been achieved,” Adeleke said.

  • Adeosun, SEC and the Oando affair

    The suspension of the Director-General of  Securities and Exchange Commission (SEC), Mounir Gwarzo, by the minister of finance, Kemi Adeosun, has not only thrown up serious questions about the minister’s complicity in shielding Oando from SEC’s regulatory axe but also opened the Pandora’s box which may put the future of the oil giant in jeopardy. Her meddling in SEC’s regulatory activities have a direct impact in eroding investor confidence and lowering the estimation of Nigeria’s capital market in the eyes of the world.

    Indeed, it would appear that what the minister, Adeosun, wanted Gwarzo to do was to circumvent regulatory principles and adopt “administrative” ways to dress up what is potentially a ponzi affair. In other words, Gwarzo’s crime is ordering forensic audit of Oando after receiving two petitions over alleged distortion of its shareholding structure and mismanagement of the company’s financial affairs. SEC had conducted a comprehensive review, which revealed massive breaches of the provisions of the Investment and Securities Act (ISA) and the SEC Code of Corporate Governance for Public Companies.

    It beats imagination that a minister who coordinates Nigerian economy wanted SEC to ignore, to the detriment of the 274,400 shareholders of the company and the Nigerian economy, the “going concern” of the company. Going concern in Oando, as stated by its auditors, means the company will not be able to continue operating for a period of time to carry out its commitments, obligations, etc.

    No one with the nation’s interest at heart would want insider dealings such as the sale of 1.21billion shares amounting to N21.5billion to be swept under the carpet. With access to confidential information to its advantage, Oando allegedly traded 1.21billion shares even before the release of the 2014 accounts (which revealed a loss in excess of N180 billion).

    Every market feeler knows that there is a cause for alarm over a labyrinth of related party transactions mostly involving the CEO of Oando, Wale Tinubu in which company paid between 2012 and 2016 for seven out of the 27 the sum of over N200billion.

    To prove that Oando’s paw is deeply trapped in related-party transaction jar, the instances are not far-fetched. On November 29, 2012, Oando Plc acquired 100% of the share capital of Churchill Finance Limited (a company incorporated in Bermuda). Churchill’s sole shareholder was the GMD of Oando Plc, Adewale Tinubu and its main asset was a Bombardier Challenger 300 aircraft. Oando Plc recognized goodwill from acquisition in the sum of N2.34 billion from this transaction, on the date of acquisition (29 November 2012).

    The act of acquiring an asset (the aircraft) from the GMD of the Company and 32 days later recognizing a loss in value of the asset raises serious conflict of interest issues and points to a failure of governance structures and internal control. As it would appear that the asset may not have been worth the value attached to it ab initio.

    Further impairment losses of N838 million and N493 million on goodwill from acquisition of Churchill were recognized in Oando’s accounts for the years 2013 and 2014 respectively and the impairment write-down carried out by the company from 2012 to 2016 amounted to approximately N202.7 billion.

    Payments to Triton Aviation Ltd a company incorporated in Nigeria whose sole shareholder was Adewale Tinubu was paid the sum of N2.83billion for 5 years between the years 2012 to 2016.

    Brol Properties Ltd owned by Adewale Tinubu provided facility management services to Oando Plc at a total cost of about N572.1 million within a period of five years.

    TSL Logistics Ltd controlled by the same Mr. Adewale Tinubu was engaged by Oando Plc to supply products and services and was paid the sum of N67.03 billion within a period of five (5) years.

    Noxie Ltd controlled by Adewale Tinubu also supplied various office equipment at a total cost of N10.2 billion between 2012 and 2016. Lagoon Waters Ltd owned by Adewale Tinubu supplied petroleum products to the company worth N9.6 Billion within a period of five years.

    SEC’s findings also show discrepancies in the shareholding structure and breach of several SEC laws  and ISA rules by Oando.

    As the regulator and watchdog, the commission, sequel to this damning discovery, placed the company’s shares on technical suspension in the Nigerian Stock Exchange (NSE) and appointed a team of experts, consisting of auditors, lawyers, stockbrokers and registrars, to conduct the forensic audit.

    Against the claims by the minister and the acting DG of SEC that the forensic audit would kick off in earnest, the fact of the matter is that no forensic audit is taking place or about to take place in the SEC.

    The claim that a court had stopped SEC from conducting forensic audit is far from the truth. On October 24, 2017 Oando sought an interim injunction to restrain SEC and NSE from conducting forensic audit and implementing the technical suspension but on November 23, 2017, the Federal High Court struck out the application for lack of jurisdiction to hear the matter and directed Oando to seek redress from Investments and Securities Tribunal.

    Evasive and cunningly dodgy, the embattled company applied to the same Federal High Court on December 13, 2017 for an interim injunction pending the hearing of the application at the Court of Appeal. Still unlucky, the court struck out the case for lack of merit on December 15, 2017. Now the question is: where does the purported court order emanate from? The bitter truth is that the case is yet to be even heard, let alone granting order restraining SEC from conducting the forensic audit.

    Another pretext the minister and the acting SEC latch on is the alleged non-release of funds by the Capital Market Development Fund (CMDF). The fund was set up by SEC to assist in achieving its dual mandate of investor protection and development of the market. It was incorporated as a limited liability and the composition of the board was approved by the minister of finance.

    At its meeting on Monday October 30, 2017, the Board of the CMDF approved the conduct of the forensic audit, engagement of the consortium and payment of N160million as their fees. In attendance at the meeting were DG of SEC Mounir Gwarzo; Director of Home Finance, Federal Ministry of Finance, Mrs Olubunmi Siyanbola; representatives of the shareholders association in persons of Dr Farouk Umar and Sir Sunny Nnamdi Nwosu; representative of the Institute of Capital Market Registrars, Dr David Ogogo; representative of Association of Stockbrokers, Ms Ify Ejezie; and representative of Association of Securities Exchanges, Ayodeji Balogun.

    In expressing viewpoints, one credo every reasonable person should hold dear to heart is removing the cataract of ethnic and religious sentiments to look at issues dispassionately. Much as one detaches from giving the crisis an ethnic coloration, Adeosun’s actions and inactions as supervisory minister of the commission are clear pointer to her culpability in the matter. The minister’s spirited efforts to save the company from regulatory gallows clearly vindicate Mounir Gwarzo who was suspended to ensure administrative patch rather than the forensic audit is done hence the latter has remained in the cooler three months after.

    • Sanda is Abuja-based financial analyst.
  • SEC yet to get MTN’s $500m IPO

    SEC yet to get MTN’s $500m IPO

    The Securities and Exchange Commission  (SEC)yesterday said it had not been notified by the MTN Group on plans to raise about 500 million dollars from Nigeria’s capital market.

    A source who pleaded anonymity told the News Agency of the Nigeria (NAN) in Lagos that the commission was yet to receive any application from MTN on Initial Public Offering (IPO).

    “As of today, we are yet to receive any application or notification from MTN on the proposed IPO,’’ he said.

    The source said that the commission would remain committed to investors’ protection and development of the Nigerian capital market.

    There were reports that the MTN Group Ltd. was perfecting plans to raise about 500 million dollars from the sale of shares in its Nigerian business in the first half of 2018.

    Standard Bank Group Ltd. and Citigroup Inc. had been advising Africa’s largest mobile-phone company on the disposal of as much as 30 per cent of the Lagos-based unit on the Nigerian Stock Exchange (NSE).

    It was learnt that the MTN had agreed to list the Nigerian unit as part of June 2016 agreement to pay one billion dollars fine for missing a deadline to disconnect unregistered subscribers amid a security crackdown.

    Speaking on the implications of MTN listing, Dr Uche Uwaleke, the Head of Banking and Finance Department, Nasarawa State University Keffi, said that the deal if perfected, would boost market capitalisation.

     

  • SEC stops free e-dividend registration

    SEC stops free e-dividend registration

    • Pay N150 to continue with e-dividend enrolment, SEC tells investors

    The Securities and Exchange Commission (SEC) has stopped the free registration for e-dividend enrollment by shareholders.

    All investors/shareholders that are yet to enroll for the e-dividend have been enjoined to continue with the registration exercise but at a cost of N150 per investment

    The Acting Director-General of Securities and Exchange Commission (SEC) Dr. Abdul Zubair, made this disclosure in Abuja yesterday at  a press briefing.

    Abdul Zubair noted that henceforth e-dividend enrollment will cost investors/shareholders “a marginal cost of N150 (one hundred and fifty Naira) only.”

    The N150 fee, he said, will not be demanded from investors at the point of registration and/or submission of completed e-Dividend Mandate Forms but after it has been confirmed that the account supplied by the investor is adequately funded and operational.

    The free registration had so far cost the SEC N315 million. Such investors, he said, “should continue to approach their banks or registrars, as usual, to seamlessly mandate their bank accounts for the collection of their dividends electronically, including unclaimed dividends, not exceeding 12 years of issue; as the N150 would not be demanded from them at the point of registration.”

    It was revealed that only 2.1 million investors have enrolled for the e-dividend registration. It would be recalled that the e-dividend Free Registration expired on December 31, 2017 by this development, the SEC said it will no longer underwrite the N150 processing fee for successful e-dividend registration as it had done in the past.

    As a result of the decision to continue with the e-dividend registration exercise, Dr. Abdul Zubair also announced the extension of Forbearance for Multiple Accounts Consolidation (FMAC).

    The decision to extend the FMAC, he said, was taken “with a view to encouraging many more investors to consolidate their multiple subscriptions into one account, the SEC till March 31,2018.

    Accordingly, “investors that bought shares of the same company during public offers, using different names, are allowed till  March 31, 2018 to continue to approach their stockbrokers or registrars, to regularise their shareholdings, in line with SEC Rules on customer identification.”

    However, all shares not regularised within the stipulated time frame Abdul Zubair said: “will be transferred, on trust, to the Capital Market Development Fund.”

    The Acting SEC boss also told journalists that “all Registrars have been directed to stop the issuance of dividend paper warrants with effect from January 1, 2018.” This he said is “in line with approved rules of the Commission.”

    He directed that, “all paper dividend warrants issued up till December 31, 2017 are valid and should be honoured by banks and registrars.

     

  • SEC, IST partner to curb market infractions

    SEC, IST partner to curb market infractions

    Securities and Exchange Commission (SEC) has expressed readiness to partner with relevant bodies in its quest to ensure zero tolerance on infractions in Nigeria’s capital market and to ensure that perpetrators of fraudulent acts are brought to book.

    Acting Director General of SEC, Dr. Abdul Zubair stated this when the chairman and members of Investments and Securities Tribunal, IST, visited him in his office in Abuja.

    Zubair said the present management of SEC has zero tolerance on infractions adding that anyone that flouts the rules will be made to face the consequences of such actions.

    He told the IST team that the SEC has been embarking on a number of initiatives to protect the investors in the market and ensure that they reap the benefits of their investments.

    “ SEC has rolled out a number of initiatives and campaigns which have been yielding results. These initiatives are to ensure that investors are aware of what to do to protect their investments”,

    “ The e-dividend is one of such campaigns and we enjoin investors to key-in so that they can reap the benefits of their investments” he added.

    Speaking earlier, the Chairman of the Investment & Securities Tribunal (IST), Isaiah Idoko-Akor Congratulated the Acting DG on his assumption of office and expressed the confidence of the Tribunal in his ability to move the market forward.

    He commended the SEC for all it has been doing to support the Tribunal in the discharge of its duties and craved for more support to avoid hitches in the Tribunal carrying out its assignments.

    “IST is serving the market, it is very important to the market and  that is why we commend SEC for its support to the IST

    “ However, IST needs to be strengthened to be able to carry out its functions effectively.

  • SEC urges civil servants to register for e-dividend

    SEC urges civil servants to register for e-dividend

    Securities and Exchange Commission ( SEC ) has urged civil servants in Lagos State to take advantage of the free e-dividend registration period, which ends on December 31, 2017, to enrol.

    Dr Abdul Zubair, the acting Director-General of SEC, made the call in a statement by the management of the commission on Monday in Abuja.

    The commission stated that Zubair, represented by the Director of External Relations of SEC, Mr Henry Rowlands, made the call at an ongoing sensitisation workshop in Lagos.

    Zubair told workers once they registered, they would start receiving unclaimed dividends and future dividends through their bank accounts.

    Read also: Reps to Adeosun: Maintain status quo on SEC

    According to him, e-dividend registration is one of the initiatives of the commission to restore investors’ confidence, as well as attract retail investors back to the capital market.

    The acting SEC boss said the registration would also allow all accrued dividends to be credited directly to the investors bank accounts.

    The Head of Service of Lagos State, Mrs Folasade Adesoye, also urged civil servants in the state to take advantage of the commission’s e-dividend campaign to enrol.

    Adesoye was represented by the Permanent Secretary, Office of the Head of Service, Mrs Fiyinfoluwa Ogunbanke.

    She commended SEC on its efforts to ensure that the era of non receipt of benefits of their investments became a thing of the past.

    According to Adesoye, the introduction of e-Dividend presents an opportunity for civil servants to tap into the initiative to enjoy the benefits of their investments in the capital market.

    “This event is meant to educate public servants on the operation of the E-dividend Mandate Management system and how investments in the capital market will give public servants opportunity to earn additional income.

    “I am happy with this initiative and I believe that this will assist civil servants in Lagos State to claim their outstanding dividends.

    “It will also enable them to receive dividends electronically.”

    The Permanent Secretary in Lagos State Ministry of Finance, Mrs Olufunlola Balogun, urged civil servants to invest in the capital market.

    According to her, investing a reasonable portion of saved income in the capital market can fetch additional income and improve peoples’ standard of living.

    “For those who have invested in the capital market and have accumulated unclaimed dividends, it will give you opportunity to understand how to receive the unclaimed dividend and future dividends” she stated.

    NAN

  • SEC sanctions: Oando goes to Appeal Court

    SEC sanctions: Oando goes to Appeal Court

    •Oil firm welcomes new SEC DG

    •’Gwarzo was compromised’

    Oando PLC has challenged at the Appeal Court the findings and sanctions on it by the Securities & Exchange Commission ( SEC ), following an alleged investigation, which began in May 2017.

    SECs had placed technical suspension on Oando PLC shares and ordered a forensic audit into the company’s affairs.

    A statement published on Oando’s website on Friday states that in addition to legal action, it has written several petitions to various arms of the government expressing concern at the way the SEC under the leadership of ex-Director General, Mounir Gwarzo, managed the investigation and their belief is that the investigation was biased, did not follow due process and lacked fairness.

    The company added that a recent leak of the signed September 18, 2017 report of the Technical Committee that was set up by Gwarzo to investigate them is further proof that under his leadership actions taken by the commission were illegal, invalid and calculated to prejudice the business of the company.

    Gwarzo set up a five-man committee to investigate the company and on conclusion present a report with findings and recommendations for sanctions. The report shows that the committee found that Oando had satisfactorily responded to all the issues raised by the petitioners and had further recommended that the responses provided by the company and its independent external auditors be forwarded to the petitioners for their information and further escalation if they deemed it necessary.

    The report makes no recommendation for the shares of the company to be suspended or for a forensic audit of the company to be conducted.

    Instead, the committee recommended that certain unresolved issues be forwarded to the Securities and Investment Services (SIS) department of the Commission to determine whether there was in fact a breach of the ISA or the SEC Rules.

    On 27 September, 2017, the Committee of the House of Representatives on Capital Markets and Institutions summoned Gwarzo and mandated him to complete his investigation into Oando and issue a report within two weeks of that meeting.

    They also requested that they be sent a copy of the report of the investigation, its findings and recommendations.

    “It is interesting to note that Gwarzo failed to inform the House of Representatives that at the time the meeting was held, the signed Technical Committee report had already been submitted.  It wasn’t until a month after, on Wednesday, 18 October 2017 that the SEC published a statement on its website detailing alleged infractions committed by Oando and weighty penalties, which included a directive to the Nigerian Stock Exchange (NSE) for a 48-hour full suspension followed by a technical suspension in the trading of Oando shares and for a forensic audit into the affairs of the company to be conducted,” the website explained.

    Against this background, the company cites a multitude of other reasons why it believes the investigation was biased and thus flawed.

    Among the reasons were the fact that some of the actions taken by the then DG were against SECs rules and regulations.

    Under the SEC rules, the Administrative Proceedings Committee (APC) is the committee empowered to look into matters of the nature of which the petitioners alleged.

    However, Gwarzo did not utilise this committee but instead set up a Technical Committee and later a Special Task Force to investigate Oando.

    SEC laws state that the DG does not have the legal or administrative authority to set up committees; only the board can do this.

    However, at the time of the investigation, SEC had no board and even if it did, there was a committee already in place that could investigate the company.

    There is also the legality of SEC investigating a petition brought by an indirect shareholder and one that is currently in arbitration when SECs rules categorically state that it will not consider any complaints regarding matters that are already the subject of arbitration or court proceedings.

    In Oando’s statement, it cites the example of MRS Oil and Gas PLC, where the SEC stopped investigating and a call for a forensic audit into MRS when it was brought to the regulators attention that there were ongoing arbitration proceedings in France between Petroci Holdings and MRS.

    The company and its shareholders have continuously raised concerns at the public nature of the investigation. At the company’s AGM in August, shareholders had spoken out about the substantial amount of media attention the investigation was receiving.

    According to the Group Chief Executive Officer (GCE), Oando PLC, Wale Tinubu: “The SEC investigation and continued media leaks have had a deleterious impact on market confidence, our share price and a negative impact on other critical stakeholders.”

    The statement makes mention of further bias by SEC agreeing to meet with the petitioners but not Oando during the course of the investigation despite several requests by the company for a meeting.

    The reclassification of one of the petitioners, Ansbury Inc. as a whistleblower despite the fact that Ansbury brought its petition to the SEC as an indirect Oando shareholder and previous SEC investigations, ie Ikeja Hotels, where the SEC did not suspend the shares of the company when it embarked on a forensic audit.

    More recently when SEC released its alleged findings and sanctions, the company was quick to respond and point out to the SEC and the public that the alleged infractions all have specific SEC penalties, none of them whether singularly or together warrant the suspension of the trading of Oando shares or the institution of a forensic audit.

    The company’s most ardent objection to the forensic audit is the fact that SEC has itself said it needs to do an audit to confirm its weighty findings.  It is unjust to make a company pay N160 million to be investigated so the regulator can confirm whether its findings are indeed correct or true.  It begs the question how did the regulator come about its weighty findings?

    The company’s biggest concern is that because all actions to date have been illegal and biased then a forensic audit could also be biased.

    This is not the first legal action taken by the company against SEC on this investigation but its recent actions is evidence that it won’t back down and will fight SEC until justice prevails.

    Consequent to the indefinite suspension of Gwarzo on allegations of corruption by the Minister of Finance, the SEC had notified Oando that it would commence the forensic audit with effect from December 6, 2017. According to the company, the appointed auditors are yet to approach the company to commence the audit.

    Oando concluded the statement by expressing willingness to comply with the directives of the commission.

    The company said: “Despite our objections to the forensic audit, the company would like to reiterate that we recognise and respect the authority of the commission and in the spirit of cooperation, transparency and full disclosure, the company will comply with the directives of the commission whilst reserving our legal rights in this matter.

    “Accordingly, we welcome the appointment of Dr. Abdul Zubair as the Acting Director-General (ADG) of the SEC and see this as an opportunity for the regulator to act independently and for a new and enduring relationship to be established.  We trust that he will investigate the matters raised in an independent and transparent manner and look forward to his support in ensuring due process is indeed followed.”

    The company reiterated that it recognises and respects the authority of the SEC and is hopeful that a new and independent DG will act in the best interests of the company and its 274,000 shareholders.

  • SEC, NSE tackle Oando over preservative order prayer

    SEC, NSE tackle Oando over preservative order prayer

    The Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) yesterday urged Federal High Court in Lagos to dismiss a motion filed by an oil firm, Oando Plc.

    Oando is seeking preservative orders in a suit it filed to challenge the technical suspension imposed on its shares to allow for a forensic auditing of its books.

    It wants the court to grant the injunction pending the outcome of its appeal challenging the suit’s transfer to the Investment and Securities Tribunal (IST).

    Justice Rilwan Aikawa, on November 23, struck out Oando’s suit, holding he lacked jurisdiction to entertain it.

    The judge said the appropriate forum to for the oil firm to ventilate its grievances was at the IST.

    Dissatisfied, Oando, through its lawyer Seyi Sowemimo (SAN), appealed.

    The oil firm also filed a motion before the lower court seeking an injunction to preserve the ‘res’ (subject-matter) pending the final determination of its appeal.

    Yesterday, SEC’s lawyer Chief Anthony Idigbe (SAN), arguing a counter-affidavit filed in opposition to Oando’s motion, noted that a motion for injunction calls for the exercise of the court’s jurisdiction.

    To him, since the court had already delivered a declarative judgment in the matter, there was nothing to be stayed.

    “The court is functus officio (without jurisdiction) after delivering judgment in the matter and we are entitled to the fruits of the judgment, which is basically the preservation of the interests of Oando’s shareholders.

    “Oando should go to the IST to seek the injunction it is seeking for. They have not told the court why they cannot go to the IST. Granting any injunction will be at the risk of the investing public’s interests.

    “They have equally not told the court what they will suffer if the forensic audit is done. We urge the court not to grant this request,” Idigbe said.

    NSE’s lawyer Chief Bolaji Ayorinde (SAN) also asked the court to dismiss the Oando’s motion and to affirm its earlier ruling by declining jurisdiction.

    But, Sowemimo urged the court to grant the motion, saying it was predicated on his client’s constitutionally guaranteed rights of appeal.

    According to him, the res Oando was asking the judge to preserve was the integrity of the appeal and not the fruits of the contentious ruling delivered by the court as claimed by the respondents.

    “If the res is not preserved, the appeal will be overreached and rendered nugatory,” he said.