The apex regulator of the Nigerian capital market, Securities and Exchange Commission, said there were misstatements in Oando Plc’s audited financial statements for the 2013 and 2014 financial year arising from Oando Exploration and Production Limited transaction.
This revelation was contained in a letter addressed to the Group Chief Executive Officer of Oando, Adewale Tinubu, by SEC.
SEC said, “Following the structuring of the OEPL transaction in contravention of the ISA 2007, Oando Plc recorded a profit of about N6bn from the sale of the OEPL that erased the operating loss of N4.68bn, leading to a profit of N1.4bn for the year 2013.
“The company subsequently declared dividends from the profit. Having admitted that the action was in breach of the ISA 2007, Oando Plc restated its 2013 and 2014 audited financial statements, which contained material false and misleading information contrary to Section 60(2) of the ISA 2007.
“The commission finds from the corporate governance returns submitted by the company for the period ended December 31, 2016 that the remuneration of the group chief executive officer and the deputy GCEO was approved by the board while the GCEO was responsible for fixing the remuneration of other executive directors, which is in violation of part 3, 14,3 of the SEC Code of Corporate Governance.”
The letter, dated October 17, 2017, was titled, ‘Re: Serious Concern to Corporate Governance Existence, Gross Abuse of Corporate Governance and Financial Mismanagement in Oando Plc’, and was signed by the Head, Legal Department, SEC, Mrs. Braimoh Anastsia.
SEC explained that the last board evaluation of Oando was done by the KPMG in 2012, stressing, “This is a violation of Part B, 15.1 of the SEC Code of Corporate Governance.”
It also alleged that there was a breach of the ISA 2007 on the disposal of OEPL by Oando in 2013.
The regulator explained that the disposal of the OEPL to Green Park Management Limited was done without the prior approval of the commission.
But Oando said in a statement on Tuesday that it had obtained an ex parte order to lift the suspension of trading in its shares as well as halt a forensic audit planned by SEC.
Oando’s share price was frozen at N5.99 on Monday until further notice, the Nigerian Stock Exchange said after SEC ordered an audit of the company’s activities.
SEC, on Monday, said the shares of Oando were now on technical suspension. With the development, the shares of the company will be available for trading on the floor of the NSE, but there will be no price movement while the technical suspension subsists.
Oando, in a statement said, “We are of the view that the SEC’s directives are illegal, invalid and calculated to prejudice the business of the company. The company being dissatisfied with the most recent actions taken by SEC and to safeguard the interests of the company and its shareholders immediately took steps to file an action with the Federal High Court against SEC and the NSE.
“Oando obtained an ex-parte order from the FHC granting an interim injunction, via an order restraining the NSE from effecting the directive of the SEC to implement a technical suspension of the shares of the company, and an order restraining the SEC from conducting any forensic audit of the company’s affairs pending the hearing and determination of the matter.