Tuesday,
October 24, 2017 10.00pm / Press Release
Following the directive by the Securities and Exchange Commission of Nigeria,
that the Nigeria Stock Exchange should effect a full/technical suspension on
the trading of the shares of Oando; the company has obtained an ex-parte order
from the Federal High Court.
The Federal High
Court Injunction is to restrain the Nigeria Stock Exchange from carrying out
the technical suspension of Oando PLC shares, and also restrain SEC Nigeria
from also going ahead with the forensic audit on the operations of the company.
In a statement signed by Ayotola Jagun the Company Secretary, Oando PLC listed
why it was challenging the directive of SEC Nigeria.
Here are the full
details of the Oando PLC response to the SEC Nigeria directive.
On October 18, 2017 the SEC issued a
public notice stating amongst others that it had:
1. Issued a directive to the Nigerian Stock Exchange
(NSE) for a full suspension in the trading of Oando shares for a period of
forty-eight hours followed by a technical suspension until further directed
and;
2. Announced that a forensic audit into the affairs of
the Company be conducted by a team of independent professional firms
Oando is 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 above mentioned actions and to
safeguard the interests of the Company and its shareholders immediately took
steps to file an action against the SEC and the NSE. On Monday October 23, 2017
the Company obtained an ex-parte order from the Federal High Court (FHC)
granting an interim injunction, as follows:
1. An order restraining the NSE and any other party
working on their behalf from giving effect to the directive of the SEC to
implement a technical suspension of the shares of the Company pending the
hearing and determination of the motion for injunction and;
2. An order restraining the SEC and any other parties
claiming through or working on behalf of the Commission from conducting any
forensic audit into the affairs of the Company pending the hearing and
determination of the motion for injunction.
The NSE and SEC were served with the
enrolled court order today Tuesday, October 24, 2017 after the technical suspension
was carried out by the NSE on Monday, October 23, 2017. In our view both the
NSE and the SEC are legally obliged to comply with the interim orders pending
the substantive determination of the suit.
The Company has found it necessary
to take these actions for the following reasons:
1.
Having declared to the public that it has acted drastically to suspend the
shares of Oando PLC due to its “weighty” findings in the course of its
investigations, SEC then concludes that a forensic audit is necessary in order
to investigate whether its findings are true. This is a clear contradiction.
How did the SEC arrive at its
findings if it cannot be sure of the veracity or otherwise of those findings
and how did it ascribe the appropriate level of weight to be given to those
findings, enough to warrant an immediate suspension followed by a technical
suspension of the shares of the Company, if those findings are still mere
allegations at this point.
2. The
Company has fully co-operated with the SEC since the commencement of this
investigation in May 2017 and provided all information requested. It is evident
that submissions made to the SEC have not been duly considered due to the
conclusions reached and actions taken, as all of the matters raised have been
responded to in great detail with all supporting documents requested by the
SEC. The Company repeatedly, through its Chairman, requested an audience with
the SEC to enable it present its case before the Commission but to date, no
invitation has been extended to the Company.
3. Each
of the alleged infractions has a penalty as prescribed by the respective
provisions of the ISA, SEC Code, SEC Rules and Regulations, NSE Listing Rules
and CAMA; none of them whether singularly or together warrants the suspension
of free trading in the securities of the Company or the institution of a
forensic audit.
4. The
latest actions taken by the SEC are prejudicial to the business of the Company
as it would hinder the ability of the Company to enter into new business
transactions and affect the confidence that existing stakeholders (lenders, JV
Partners, Vendors etc.) have in transacting business with the Company. The
Company has received numerous queries from critical stakeholders, including its
lenders as a result of the SEC’s actions and an indefinite technical suspension
of its shares as well as an open-ended forensic audit will negatively impact
the ability of the Company to conduct its day-to-day business and meet the
expectations of all its stakeholders.
5. By
two letters dated August 24th and August 28th the Chairman of Oando petitioned
the DG of the SEC alleging bias and lack of due process in the way and manner
in which the SEC has conducted this investigation. The current action by the
SEC, despite its internal findings, confirms that the SEC appears to be working
to its own conclusion rather than looking at the facts before it and acting in
the best interest of the Company and the minority shareholders whom it claims
it seeks to protect.
6. In
its most recent communication to the Group Chief Executive (GCE) dated October
17, 2017, the SEC unilaterally qualified one of the petitioners, Ansbury Inc.
as a Whistleblower despite the fact that Ansbury brought its petition to the
SEC as an indirect “shareholder” of the Company. The Company has from the date
of its earliest communication to the SEC on this matter, challenged both the
legal capacity of Ansbury to bring a petition against the Company and the SEC’s
jurisdiction to consider the petition. This is because, Ansbury is not in fact
a shareholder of the Company and furthermore, there is an on-going arbitration
in the United Kingdom in respect of its indirect investment in the Company.
Under the SEC’s Complaints Management Framework it shall not consider any
matter which is currently in arbitration. The unilateral and arbitrary
re-classification by the SEC of the basis upon which Ansbury wrote its petition
at this late stage is at odds with accepted principles of fairness and due
process. It is also difficult to understand how Ansbury can be a whistle-blower
when the information and allegations contained in its petition were obtained
from the publicly disclosed 2016 Audited Financial Statements of Oando and
based on Ansbury’s own interpretation of those financial statements.
7. The
two petitioners, Alhaji Dahiru Mangal and Ansbury Inc. were copied on the SEC’s
most recent communication to the Company’s GCE on October 17, 2017. It is
unheard of and prejudicial to our case for petitioners to be copied on
correspondence to the investigated party on findings yet to be concluded.
Throughout this investigation, at no point has the SEC copied the Company in
its correspondence to the petitioners. We are concerned that the petitioners
have been given undue access to what ought to be strictly confidential
information between ourselves and the SEC to the detriment of the Company.
8. The
cost implication of the forensic audit (N160, 000,000.00) which is to be borne
by the Company is onerous, unnecessary and irresponsible in light of the above
submissions and not the best use of shareholder funds at this time.
It is our position that the SEC has
not presented a strong case to support either the directive to suspend free
trading in the shares of the Company or the engagement of a Forensic Auditor to
conduct an audit into the affairs of the Company. The Company’s response to
each of the alleged findings made by the SEC are stated HERE.
The Company reserves the exercise of
its full legal rights in the protection of the Company’s business and assets
whilst remaining committed to act in the best interests of all its
shareholders.
Find below a copy of the stamped court
order:
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