What Investors Expect Following SEC, Oando Settlement

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Tuesday, August 31, 2021 / 01:34 PM / by Proshare Research / Header Image Credit: Premium Times/Ecographics

 

Following a court judgement in favour of Oando Plc and its shareholders, Nigeria's Security and Exchange Commission (SEC) on 19 July 2021 announced the settlement of outstanding cases against Oando Plc buoyed by the need to protect the interests of shareholders. In a circular signed by the commission, the settlement read Pursuant to the powers conferred on the SEC by the Investments and Securities Act 2007, and the Rules and Regulations made pursuant thereto, the Commission on Thursday, July 15, 2021, entered into a Settlement with Oando Plc (the Company).

 

To give a bit of context, the commission had in its letter to the company dated May 31, 2019, gave certain directives and imposed sanctions on the company, following investigations conducted pursuant to two petitions filed with the commission in 2017. 


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Recall that in 2017, the commission had received two petitions concerning gross corporate governance misconduct and financial mismanagement in Oando Plc. In response, SEC in 2019 barred the company's top management from the boards of public companies for 5 years, prohibited the directors from holding an annual general meeting, and later fired the directors.

 

The recent victory of Oando Plc on the matter was predicated on a few court cases filed by shareholders including Engr. Patrick Ajudua in Abuja and Alhaji Yakubu Gumel and in Kano, challenging the directive of the SEC in suspending the company's AGM which they said breached their rights to freedom of association. The court favoured the cases filed, translating to victory for the company.

 

The trading sessions after the settlement saw investors responded with a mixed bag to the company's victory. In the earliest days following the settlement, investors responded with buying interests in the company's shares. The share price increased by +29.5% in the three consecutive trading sessions following the settlement and topped the gainers' chart on the third day-February 24, 2021. The price remains elevated few weeks following the settlement but has since declined to trade at lower prices in recent weeks (See Table 1 below).

 

Nonetheless, the share price has risen by +29.7% YTD and sells currently for N4.80 as at the close of the trading session on 27 August 2021. Also, Oando achieved its highest trading volume at 56.3million on 29 July 2021, few days after the settlement with SEC.

 

Table 1: Oando Share Price Changes as of 27 August 2021

Time

1week

4weeks

3months

6months

1year

YTD

Changes

-2.04%

-1.84%

+60%

+54.8%

+104%

+29.7%

Source: NGX

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Shareholders' Thoughts

The lingering crisis between Oando and SEC has been a thorn to investors given its negative effect on the company performance. Stakeholders are relieved that the lingering crisis has finally been resolved and hope for better performance for the company.

 

The company shareholders believed that the suspension period was a bad omen for them. Currently, the consensus seems to rally around the excitement about the settlement of the Oando SEC crisis. Shareholders noted that the means of settlement corresponded with their previous position that there was a need for out-of-court settlement between both parties.

 

A shareholder of the company commended both SEC and Oando for playing their respective roles to ensure that the dispute was put to rest. In his word, SEC should be commended for having the interest of investors in settling its case with Oando. The management of Oando also deserves commendation for taking steps to resolve their issues with SEC.


Speaking on the expectation of shareholders following the court settlement, another investor noted that, the resolution is a good development for the Nigerian capital market. There is an expectation that Oando Plc will continue as a going concern and make their financials available as at when due. Shareholders expect Oando to stabilize as a company and return to the path of sustainability.

 

Another shareholder noted that the company's stock had benefitted from the settlement as the share price has stabilized between N4.5ok and N5. However, he believed that the forthcoming Annual General Meeting and the release of the company's financial results will have a significant effect on the company's share price.


Commenting on what is expected from the company in the near term, a shareholder emphasised the need for Oando's Board to cooperate and align with corporate governance principles in the near term. He noted that there is also a need for barring political intrusion from disrupting the effective execution of the regulator's duties, especially on the resolution of issues in the corporate world.

 

Meanwhile, another investor also warned that caution must be taken to ensure the company adheres to corporate governance principles going forward.

 

Oando's Lines of Action for H2

As shareholders and investors watch out for the company's earnings and the signalling effect of the court ruling and SEC action on Oando share price, the company's shares may yet be viewed with keen scepticism till the ripple effect is much clearer. Analysts expect the company to leverage few activities to foster its rebound. 

 

First, Oando may need to deliver sound successive financial statements in Q3 and Q4 2021 to boost investors' confidence in the company.

 

Second, the company may need to strengthen its corporate governance structure to enhance governance oversight, regulate risk, and block the leakages that induce financial management challenges. This would strengthen the company's culture of integrity and reduce the possibility of future sanctions.

 

Third, the company may need to deploy resources and time to deliver the all-desired Annual General Meeting (AGM) to reassure shareholders of the protection of their rights, the transparency of the management, and to resolve all outstanding issues of the stakeholders. 


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Related Reports

  1. Memo to The Market: The Oando Corporate Journey - At The Regulators Gate - Dec 10, 2017
  2. Download Full (PDF) Report - Memo to The Market: The Oando Corporate Journey - At The Regulators Gate - Dec 10, 2017
  3. Download (PDF) Report - SEC Technical Committee on Oando Plc 2017 -Dec 04, 2017
  4. Review of the SEC Technical Committee Recommendations, Opinion and Final Report


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Related News on Oando

  1. Shareholders Hail Management of Oando Plc for Reaching Settlement with SEC
  2. 3 Years Later, SEC and Oando Plc Resolve Impasse
  3. SEC Issues Update on the Suspension of the AGM of OANDO Plc
  4. SEC Files Stay of Execution of the Judgement in the Suit Involving Engr Ajudua Vs SEC and OANDO
  5. FHC Kano Rules for Oando Shareholders, Says SEC Overreached its Regulatory Powers
  6. OANDO Plc Responds to Abuja Court Ruling
  7. OANDO and SEC Legal Battle Continues as OANDO Appeals Court Ruling
  8. OANDO Share Price up 10% off Positive Court Ruling as SEC Reacts to the Court Judgement
  9. Engr Ajudua Secures Judgement as Court Stops SEC from Infringing on OANDO Shareholders Rights
  10. Oando Foundation Commemorates 10 Years of Bridging the Gap in Basic Education
  11. Oando Foundation Initiates Project to Promote Environmental Education and Responsibility
  12. OANDO Notifies of Delay in the Publication of its Q3 2020 Financials
  13. Oando's Nigeria at 60 Digital Platform Showcases Indigenous Talent and Instils National Pride
  14. Oando Joins Business Leaders to Pledge Support For Multilateralism as The United Nations Turns 75
  15. Oando Hosts Webinar on Revolution Based Change to Achieve Inclusive Growth
  16. OANDO Announces Delay in Filing Audited 2019 and Q1 2020 Unaudited Financial Statements
  17. Oando and IoD Host Webinar on Leadership Strategies for Navigating the Impact of COVID-19
  18. Oando, Aiteo, Seplat and Others Collaborate To Fight COVID-19
  19. Oando Becomes First Oil and Gas Company in Nigeria to be ISO 27001 Certified
  20. Oando Plc Announces the Successful Signing of Two Gas Supply Agreements with NLNG
  21. International Volunteer Day - Oando Foundation Refurbishes Early Childcare Classes
  22. Oando PLC Announces YTD September 2019 Results, Posts N13.1bn Profit-After-Tax
  23. OANDO Declares N13.06bn PAT in Q3 2019 Results (SP:N3.40k)
  24. NSE Reclassifies Oando Plc As Low Priced Stock
  25. NNPC, NAOC and OANDO JV Makes Gas and Condensates Discovery
  26. Oando Reaffirms Commitment to Support the Development of Sao Tome and Principe
  27. OANDO, MORISON And 82 Others Record Drop In Share Price In Ten Years
  28. Oando Plc Appoints Dr Alex Irune As An Executive Director; Mobolaji Osunsanya Resigns
  29. OANDO Declares N7.17bn PAT in Q2 2019 Results,(SP:N3.95k)
  30. Federal High Court Adjourns SEC Vs Oando Case to July 22
  31. Deloitte Issues Press Statement on OANDO Forensic Audit
  32. Oando PLC Responds to SEC's Statement Regarding Fair Hearing in the Investigation of the Company
  33. Two Weeks After: OANDO Shares Dropped By -7.14%, -22% YTD
  34. FHC Lagos Adjourns Hearing Between Oando Plc's GCE and Deputy GCE and SEC
  35. Oando PLC's Official Response To SEC's Suspension Of Its 42nd AGM
  36. SEC Suspends OANDO's Prior Approved AGM Scheduled To hold on June 11, 2019
  37. Oando Update: SEC Aligns Principle Of Fair Hearing With Cooperation During Investigations
  38. One Week After: OANDO Shares Dropped By -4.76% WoW, -20% YTD
  39. Chief Sena Anthony and Mr. Oghogho Akpata Resign From OANDO's Board Effective June 3rd, 2019
  40. Oando Share Price Drops 20% Off The Back Of SEC Investor Protection Moves
  41. OANDO Declares N4.63bn PAT in Q1'19 Results (SP:N4.85k)SEC Appoints Interim Management Team For Oando Plc Headed By Mr. Mutiu Olaniyi Adio Sunmonu
  42. Post-Forensic Exchanges: The SEC Letter to Oando Plc and The Oando Rebuttal
  43. Oando Challenges SEC's Ruling On The Outcome Of The Forensic Audit Into Oando PLC
  44. SEC Announces Far-Reaching Decisions On The Investigation Of Oando Plc
  45. Oando Optimises Value From Midstream Business
  46. OANDO Declares N4.63bn PAT in Q1'19 Results (SP:N4.85k)
  47. Oando PLC Announces Divestment of its Residual 25% Interest in Axxela Limited
  48. Oando's Plan to Deleverage and Remain Profitable
  49. Oando Plc Announces FYE 2018 Results, Posts N28.8 Billion Profit-After-Tax
  50. OANDO Declares N28.79bn PAT in 2018 Audited Results (SP:N5.65k)
  51. Oando PLC Announces YTD September 2017 Results; Gives Operational Highlights
  52. Oando Plc state Positions on the Securities and Exchange Commission Alleged Findings
  53. Oando Secures Court Injunction, restraining SEC, NSE
  54. Oando Shares Now Available for Trading, No Price Movement During Technical Suspension
  55. JSE Follows NSE, Suspends Trading in the Shares of Oando Plc
  56. Oando Gives Holding Response on SEC's Directive to NSE to Suspend Trading of Its Shares
  57. Oando PLC's Official Statement on the SEC's Directive to The NSE to Suspend Trading of Its Shares
  58. NSE, SEC Confirm Decision To Suspend Trading On The Shares of Oando Plc
  59. Trading on the Shares of Oando Plc Suspended; Reasons Unknown
  60. Oando Gas & Power Rebrands as Axxela
  61. House of Reps gives SEC Two weeks to submit Report on Oando PLC
  62. Oando Plc. - AGM Resolution
  63. Oando Plc holds 40th AGM, engages Shareholders on the Progress of its Restructuring Plan
  64. Oando Plc's 40th AGM To Hold As Planned Following SEC Confirmation
  65. Oando Plc to Hold 40th AGM on Sept 11, 2017
  66. Oando Plc Issues an Update on Claims of a SEC Investigation
  67. OANDO Declares N4.56bn Profit in Q2 2017 Results,(SP:N7.80k)
  68. Oando Issues Press Release over SEC Investigation
  69. Corporate Earnings for the Week Ending 140717 - UCAP declares N1.99 billion Profit in Q2'17 Results
  70. SEC Investigating Oando Plc
  71. OANDO Plc Announces Closed Period
  72. Oando Provides Clarifications on its Refinery Ambitions
  73. OANDO Declares N1.71bn Profit in Q1 2017 Results,(SP:N5.80k)
  74. OANDO Plc Announces Closed Period
  75. Oando Plc to Hold 2016 AGM on Tuesday 2nd August
  76. Oando Plc Key Highlights on Q4 15 and Q1 16
  77. OANDO Concludes Recapitalization Partial Divestment of Equity Stake in Its Downstream Operations
  78. Material Uncertainty May Cast Doubt on Oando's Ability to Continue as a Going Concern - Ernst & Young
  79. OANDO Releases Q4 15 and Q1 16 Results Declares N4.10bn PAT in Q1 SP N6.50k
  80. Oando Plc Secures 5 Year N94.6 Billion Medium Term Facility with 10 Nigerian Banks
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  82. Why Oando Plc's 2015 Audited Statements will be released on May 31, 2016
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  84. The Corporate Governance Rating System - Proshare
  85. ETI, Oando Plc under Fire over Ownership, Governance

 

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Related News on SEC Laws and Corporate Governance

  1. The-Market-Memorandum-Fundamental-Considerations-for-Capital-Market-Reforms-in-Nigeria/2910
  2. Corporate Governance and Directors' Remuneration
  3. SEC Proposes New Rules & Amendments to Rules on Book Building, Corporate Governance
  4. Good Corporate Governance is Good Business
  5. SEC, Udo Udoma And Corporate Governance: The Fact Files
  6. Enabling Law - Investment and Securities Act (ISA) 2007
  7. SEC Nigeria's Executed Rules and Regulations as at June 2017
  8. SEC Nigeria's Consolidated Rules and Regulations as at 2013
  9. Code of Corporate Governance for Public Companies_4 April 2011


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Related News on Oando from Other Sources

  1. N236bn Liability: Oando Shareholders Protest in Ibadan - Independent
  2. Intel's Volpi Steps Up Battle Against Wale Tinubu over Control of Oando - ThisDay
  3. Suspension of OANDO PLC - SEC
  4. Oando Shareholders Set To Sack Wale Tinubu, Board - Independent
  5. Notice to the General Public on Oando Plc - SEC
  6. So what's happening at Oando (2)? - Business Day
  7. So what's happening at Oando (1)? - Business Day
  8. The inside story: Why SEC ordered a Forensic audit of Oando Plc - Business Day

 

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