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.
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