The Institute of Directors (IoD) Nigeria has launched an investigation into the crisis between the Securities and Exchange Commission (SEC) and Oando Plc.
It has mandated its directors of Development and the Ethics committees to review the crisis between the apex capital market regulator and the quoted indigenous oil and gas company.
According to IoD Nigeria, its interest is borne out of its commitment to entrenching good corporate governance in Nigeria.
In a statement signed by its Director General, Mr Bamidele Alimi, IoD Nigeria stated that the committees “would make appropriate recommendations for the consideration of the Governing Council of the Institute”.
“As the professional body for Directors in Nigeria, IoD Nigeria has taken a very keen interest in the developments and is monitoring the outcomes of all the actions initiated by all the parties concerned. There is no doubt that these developments have created huge lessons for all corporate Directors as well as SEC regardless of whatever their eventual outcome may be,” IoD Nigeria stated.
SEC had on May 31 released a statement indicting the management and board of Oando of sundry corporate governance abuses and infractions of relevant capital market laws.
SEC barred the Group Chief Executive Officer (GCEO) and the Deputy Group Chief Executive Officer (DGCEO) of Oando from being directors of public companies for a period of five years. SEC also ordered certain members of the board of directors of Oando to resign.
The apex capital market regulator stated that it had concluded investigation into alleged corporate governance abuses at Oando and found that the company was guilty of serious infractions and market abuses.
SEC also directed the payment of monetary penalties by the company and affected individuals and directors, and refund of improperly disbursed remuneration by the affected board members to the company.
SEC also directed the convening of an Extra-Ordinary General Meeting on or before July 1 to appoint new directors.
These, among others, the SEC stated, were part of measures to address identified violations in the company.
According to the SEC, following the receipt of two petitions by the Commission in 2017, investigations were conducted into the activities of Oando. Certain infractions of relevant laws were observed. The Commission further engaged Deloitte & Touche to conduct a forensic audit of the activities of Oando.
On June 2, SEC appointed an interim management team headed by Mr. Mutiu Sunmonu, a former Managing Director of Shell, to oversee the affairs of Oando and to conduct an extra ordinary general meeting on or before July 1 to appoint new directors to the board of the company, who would subsequently select a management team for Oando.
Oando, however, described the directives from the SEC as attempts to prejudice the business of the company.
The company stated that the alleged infractions and penalties were unsubstantiated, ultra vires, invalid and calculated to prejudice the business of the company.
According to the company, it has not been given the opportunity to see, review and respond to the forensic audit report and so unable to ascertain what findings were made in relation to the alleged infractions and defend itself accordingly before the SEC.
A Federal High Court of Lagos under presiding Judge C. M. A. Olatoregun on Monday, June 3, granted Oando’s GCE, Adewale Tinubu, and DGCE, Omamofe Boyo, an injunction restraining SEC from taking any step concerning its decisions indicting the board and management of Oando of sundry corporate governance malpractices and market abuses.
The court also restrained Mutiu Sunmonu, who was appointed by SEC, from acting as the head of the interim management of Oando. The court ordered a stay or suspension of the enforcement of the execution of the SEC’s decisions as contained in its letter dated May 31.
The injunction directed all parties involved to maintain the status quo pending the determination of the motion on notice. The case was adjourned till June 13, 2019 and on the adjourned date, subsequently adjourned to June 24, 2019.
However, Oando on Friday, June 7 announced that two non-executive directors, Chief Sena Anthony and Mr. Oghogho Akpata, had resigned from the board of directors with effect from June 3. A source at Oando said the non-executive directors were frustrated and intimidated by the antics of SEC. Oando described Anthony and Akpata as active members of the board and its subcommittees.
On Monday June 10 ordered the suspension of Oando’s Annual General Meeting (AGM), which had been scheduled for Tuesday, June 11 in Lagos. SEC stated that the suspension was based on the ex-parte order of the Federal High Court, Ikoyi, Lagos, which ordered status quo to remain.
SEC stated that it suspended the AGM until further notice to allow the parties maintain status quo adding that it would update relevant stakeholders and the public on the outcome of the ongoing litigation.
Oando disagreed with SEC’s position, pointing out that it had by notice to the public and its shareholders on May 10 validly convened its 42nd AGM. In its response to the suspension filed at the NSE, Oando stated that the cancellation of the scheduled AGM by SEC was not in the best interests of the company and its shareholders who had travelled at great expense, from far and wide, to attend the event.
“The company also stands to lose significant shareholder funds by the attendant cancellation of the AGM at such short notice,” Oando stated.