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Oando, SEC Fiasco: Intrigues, Politics, Business

-By Gideon Osaka

The recent directive by the Securities and Exchange Commission, SEC, to Oando Plc, to appoint new directors and hold a general meeting by July 1, 2019, thereby compulsorily resigning the Chief Executive Officer, Wale Tinubu and his deputy, Omamofe Boyo, may not have surprised many people who have been following the goings-on in the company.

What however kept tongues wagging are the twists and timing associated with the directive. The directive came at a time Munir Gwarzo, suspended Director General of SEC was ordered to be reinstated with immediate effect by the National Industrial Court, while his salaries and allowances should be paid to him. Gwarzo was indicted for abuse of office and corruption by an Administrative Panel of Inquiry set up by the Federal Ministry of Finance headed by the Permanent Secretary, Dr Mahmoud Isa-Dutse. Prior to this, Oando and SEC have been embroiled in boardroom tango.

Bola Ahmed Tinubu

Two years ago, Dahiru Mangal and Ansbury Incorporated sent a petition to SEC objecting to the Annual General Meeting (AGM) of Oando Nigeria Plc billed for September 11, 2017, over alleged corporate governance breaches by its management. Mangal is a substantial shareholder in Oando Plc, while Ansbury, is a majority shareholder in Ocean and Oil Development Partners which owns 56 percent equity stake in Oando Plc. Their petition was for SEC’s intervention to change the management of Oando. They alleged that the management wanted to continue running the oil firm even when it was not improving its fortunes. Subsequently, in March 2018, SEC engaged Deloitte and Touche to conduct a forensic audit of the activities of Oando Plc.

The result of the forensic audit was said to have informed the decision of SEC to take the measure on Oando. According to the regulatory body, “The general public is hereby notified of the conclusion of the investigations of Oando Plc. The findings from the report revealed serious infractions such as false disclosures, market abuses, misstatements in financial statements, internal control failures, and corporate governance lapses stemming from poor board oversight, irregular approval of directors’ remuneration, unjustified disbursements to directors and management of the company, related party transactions not conducted at arm’s length, amongst others.” The commission also directed that the Group Chief Executive Officer (GCEO) and the Deputy Group Chief Executive Officer (DGCEO) of Oando Plc should resign and refund improperly disbursed remuneration among others. According to the company’s 2018 full year financial statement, Employee benefit page 65, Wale Tinubu earned N568 million ($1.58million) making him the highest paid CEO in Nigeria.

SEC also stated, “Oando Plc failed to establish an effective system of internal controls as required under Section 61 of the ISA 2007, over its financial reporting thereby compromising the integrity of the company’s financial controls and reporting as revealed by the misstatements in the financial statement, a high number of related party transactions and unjustified disbursement to directors.

“In 2013, Oando Plc reported the sale of its subsidiary, Oando Exploration and Production Limited (OEPL), to Green Park Management Limited without obtaining the approval of the commission, (in violation of the provisions of the Investment and Securities Act (ISA) 2007) and the consent of the Minister of Petroleum (As required under the Petroleum Act,1969).

“In 2012, 2013 and 2014 and 2015, certain insiders of Oando PLC sold shares of the company during “close period” despite having knowledge of active closed periods by the company and contrary to the Rules of the NSE. The insiders include Ocean and Oil Investment Limited (OOIL – represented by Jubril Adewale Tinubu and Godwin Omamofe Boyo), Ocean and Oil Development partners (OODP – represented by Jubril Adewale Tinubu, Godwin Omamofe Boyo, Francesco Cuzzocera), and ECP African Fund II PC (a Company in which Nana Appiah-Korang was Director).

Governor Nasir el-Rufai of Kaduna State

Speaking on the issue, Atobatele Musibau, spokesman of Ansbury Incorporated said, “The earlier this matter is resolved the better for the company and its shareholders. Whether the management of Oando likes it or not, this unending war of attrition has impacted and will continue to impact the company negatively.” Explaining that the best option for both parties is dialogue, Musibau said the recovery in oil prices is a sign that the company can improve under the right atmosphere. “One must state that Oando has not recorded any meaningful capital gains, nor has it paid dividends to investors in more than four years. We are therefore the grass that suffers as these two elephants slug it out. “We, therefore, call on the management of Oando not to miss out on the golden opportunity provided by the turnaround of the oil industry to improve on the fortunes of shareholders. “We want to see better returns, capital appreciation of our shares and payment of dividends in the not too distant future. This can only happen, however, if the management resolves all pending rifts to enable it to concentrate on running the company,” he added.

Giving a political colouration to the issue, Reno Omokiri, aide to former President Goodluck Jonathan, attributed the fiasco to a calculated plan to clip the wings of former governor Bola Tinubu of Lagos State. He stated, “The cabal is using Kaduna Governor, Nasir El-Rufai to clip Bola Tinubu’s wings politically through the instrumentality of the Securities and Exchange Commission. This is because the bond between Bola Tinubu and his Nephew Wale is so deep. It would be recalled that there have been hints that Tinubu would run for presidency come 2023 a position which El-Rufai also has an interest. “The fact that Nasir El-Rufai unleashed his salvo about cutting certain godfathers to size, three weeks ago in Lagos, and then this recent move by the Securities and Exchange Commission against a company that is only one degree separated from both El-Rufai and Tinubu, cannot be a coincidence. Not at all!” Reno stated.