Court Halts Sacking Of Tinubu, Boyo As Oando Directors
By Joseph Onyekwere, Odita Sunday, Hellen Oji and Yetunde Ayobami Ojo
A federal High Court, Lagos has restrained the Security and Exchange Commission (SEC) from taking any step concerning its imposition of a fine of N91,125,000.00 on the Group Chief Executive Officer of Oando Plc, Mr. Wale Tinubu, and barring him and his deputy, Mr. Omamofe Boyo, from being directors of public companies for a period of five years.
Justice Mojisola Olatoregun granted the order yesterday following an ex-parte application accompanied with an affidavit of urgency filed before the court by Dr. Olisa Agbakoba (SAN) leading two other senior advocates, Tayo Oyetibo and Oluyede Delano.
The judge asked SEC to stay action on the matter pending the determination of the substantive suit.
In the affidavit sworn to by Boyo, the deponent averred that by the letter dated 18th of May, 2017, SEC wrote to Oando requesting a response to allegations in a petition written by Asbury Inc. Investment Company and Alhaji Dahiru Mangal dated 2nd May, 2017 of abuse of corporate governance and purported mismanagement of Oando’s business.
Oando said it duly addressed all the allegations in the petition through its letter dated 24th of May, 2017. Other letters written by SEC concerning this issue were equally addressed.
Thereafter SEC suspended trading on Oando shares. Due to the negative effects of the suspension, the company filed a legal action against SEC to challenge the commission’s decision.
The matter was later taken to the Court of Appeal when the case was struck out for lack of jurisdiction by the Federal High Court in Lagos. Following discussions with SEC, it was agreed that the suspension be lifted.
Oando withdrew its appeal against the ruling of the Federal High Court, while Akintola Deloitte was retained as the sole auditor to conduct the forensic audit of the company. The company did not receive any further communication from SEC until May 31, 2019 when it got SEC’s letter informing it of the conclusion of Deloitte’s audit.
In its letter, SEC decided that Tinubu should pay N91,125,000.00 to SEC for breaching section 60 (2) of the Investments and Securities Act 2017. The crisis worsened yesterday as staff of the company were allegedly forced to stay away from work when policemen stormed the head office in Lagos.
The SEC announced on Sunday night that it had set up an interim management team to oversee the affairs of Oando following the order that its Group Chief Executive Officer, Mr. Wale Tinubu, and other affected board members should resign.
In a statement on Sunday, SEC said: “Further to our press release on Oando Plc, dated May 31, 2019, the commission hereby informs the public of the constitution of an interim management team headed by Mr. Mutiu Olaniyi Adio Sunmonu, to oversee the affairs of Oando Plc, and conduct an extraordinary general meeting on or before July 1, 2019 to appoint new directors to the board of the company, who would subsequently select a management team for Oando Plc.”
The SEC had earlier on Friday announced the conclusion of the investigation of Oando and ordered Tinubu and other affected board members to resign. The apex capital market regulator also said it barred Tinubu and the Deputy Group Chief Executive Officer of Oando, Mr. Omamofe Boyo, from being directors of public companies for a period of five years.
The commission said findings from the report revealed serious infractions such as false disclosures, market abuses, financial misstatements, internal control failures, and corporate governance lapses, “stemming from poor board oversight, irregular approval of directors’ remuneration, unjustified disbursements to directors and management, related party transactions not conducted at arm’s length, among others.”
But Oando said the “alleged infractions and penalties are unsubstantiated, ultra vires, invalid and calculated to prejudice the business of the company.”
When The Guardian visited Oando’s Wing Office complex located on Ozumba Mbadiwe Avenue, Victoria Island, policemen numbering over 10 were seen with their patrol vans inside the complex, which houses other companies.
A top police source said the security agents had no business in the crisis. “It is the court sheriffs and not the police. I am sure they are executing a court order.”
The Lagos State Police Command spokesman, Bala Elkana, could not be reached for comments as his phone rang without a response. When contacted, sources at SEC said that the commission would speak on the issue as soon as possible.
At the close of trading yesterday, the shares of the petroleum giant depreciated by 40 kobo or 9.52 per cent to close at N3.80kobo from N4.20kobo at which it opened for transaction at the beginning of the market.
Operators who spoke to The Guardian expressed worry over the Oando crisis, noting that the company is well diversified in the petroleum industry to become a force to reckon with to the benefit of investors.
Specifically, the Managing Director of Highcap Securities Limited, David Adonri said: “There was an initial reaction in the market wherein the Oando shares were on full offer for a very long time within transaction period until some mopping up occurred. It was on offer at 3.80 kobo for a very long time and they mopped it up and took it at N4.00 and it fell back again.
“ In my own view, the mopping was artificial because it was not reflective of market sentiments and circumstances surrounding what the enterprise is facing. There must have been concerted efforts to rescue the security today but how long the people can rescue it is what one cannot predict.”
Adonri said market operators had been worried on the unstable movement of Oando shares on the trading floor of the exchange in the last five years.
“They will come and raise money from the market and investors would not benefit from the money they raised and they will come back again and raise more money and the value of the shares continued to diminish against the backdrop that the directors of the company were feeding fat.
“So it has been something in the market that is quite disappointing to say the least because you realise the fact that the market is well positioned in the commanding height of the economy and the company is well diversified in the petroleum industry. It is supposed to be a force to reckon with in the industry and the benefits ought to trickle to investors, that was why it was well embraced by investors.”
“The problems of Oando are not insurmountable considering how well positioned it is. Its diversification strength is a potential that the interim management can leverage to turn the business around.”
The President of Constance Shareholders Association, Mallam Shehu Makail, described members of the interim management instituted by the SEC as experts in the petroleum industry that have the competence to transform the company for the benefit of investors.
“Bringing someone like Sunmonu is a signal that the SEC wants to do the right thing and restore sanity to the company to the betterment of all stakeholders. Since Oando is going more in the upstream market and focusing less on the downstream, bringing Sunmonu who is a former country chair of Shell would restore investors’ confidence in the company.”