Deadlock in SEC case as Oando heads to appeal court ruling

The management of Oando Plc has indicated its willingness to appeal Thursday’s court ruling presided over by Justice Giwa Ogunbanjo at the Federal High Court Abuja, declining jurisdiction to hear suits by the Group Managing Director of Oando Plc and its Deputy, against their sack from the company by the Securities and Exchange Commission (SEC), on its, stating that the Investment Securities Tribunal (IST) is the appropriate forum to hear the matter.

The basis for the Court’s decision is Section 36(2) of the Constitution which allows aggrieved individuals to first approach any tribunal or administrative agency to determine civil rights and obligations as long as that process and the resulting decision is not final. The Court also reiterated that the IST has primary jurisdiction over Applicants (Oando and its Principals) in respect of capital market issues and not the Federal High Court.

An Oando official has explained that as much as they respect the decision of the court, in their opinion, the court did not address their concern thus the battle is far from over as they have lodged an appeal with the courts in Abuja, contesting the court’s decision to refer the case to the IST. The company and its affected directors argue that the powers conferred by the Constitution of the Federal Republic of Nigeria on its citizens to enforce their fundamental rights supersedes the provisions of the Investment and Securities Act 2007.

In 2019, Oando and some of its directors, filed a case against the regulator for breach of their human rights to fair hearing, following sanctions imposed on the company and its directors by the SEC in a letter dated May 31, 2019. However, following a suit filed by the company’s principals Adewale Tinubu and Omamofe Boyo, the Federal High Court of Lagos granted an injunction restraining the SEC from executing any of the sanctions.

They have also filed an application for stay of execution as well as an injunction pending appeal on the SEC’s May 31, 2019 letter to the Company, and as such the status quo that existed before today’s ruling remains unchanged meaning nearly 2 years on SEC’s hands are tied and they are still unable to implement sanctions on the company or its directors.

Shareholders have called on the SEC and Oando to settle the matter out of court, as the tussle keeps impacting on their investment. Some shareholders have gone as far as dragging both parties to court to seek an end to this case.

In a recent court case, various factions of Oando’s shareholders filed a case against the SEC in the persons of Yakubu Gumel; Kabiru Tambari, suing for himself and on behalf of the Sokoto Zone Shareholders Association; Tunde Badmus, suing for himself and for the benefits of Pacesetters Shareholders Association, at the Federal High Court Kano.

The shareholders filed for an interim order restraining SEC, its agents or representatives from acting on its May 31, 2019 letter sanctioning the Management of Oando; the request if granted will restrain the SEC, its agents or anyone acting on behalf of the Commission from disturbing or meddling with the affairs, management and activities of Oando PLC. The shareholders also requested an order restraining the SEC’s purported interim Management from interfering with the administration and activities of the company as well as an order restraining SEC from interfering with the shareholder’s exercise and performance of their statutory powers and duties as shareholders.

Tambari Kabiru, one of the applicants, an Oando shareholder since 1991 explained why he decided to sue the apex regulator. He said “I’m not happy with the current state of my investment. I invested my money heavily with the hopes of capital appreciation and this has not been the case. This SEC and Oando case is affecting the appreciation of our investment and it isn’t appreciating, it gets worse each year. For over two years now we have been totally in the dark on our investment in Oando. Where in the world is this done? Oando’s shares would have appreciated greatly if this issue wasn’t hovering over our heads. Year on year, our investment has depreciated in value. We are tired! As a shareholder I am strongly behind the Management of Oando. Not everyone can withstand the backlash this crisis has put the Management through these past four years and still remain committed to doing the job. We have reached out to the SEC and appealed a resolution, but they haven’t listened to us, that’s why we’ve taken this matter to court.”

The court hearing between the SEC and aggrieved shareholders has been adjourned to March 17, where it is hoped a ruling will be delivered by the Court.

On Tuesday, February 23, 2021 there was a court ruling in favour of an Oando shareholder Patrick Ajudua (an engineer). He had challenged the regulator in a suit filed at the High Court of the FCT. He had challenged the SECs right to prevent the convening of an Annual General Meeting as a breach of his right to freedom of association.

In a hearing presided by Honorable Justice O. A Musa, all cases filed were granted in favour of Patrick Adjudua. In summary the judge declared that the May 31, 2019 letter of SEC to Oando sanctioning its management, as unconstitutional, null and void and violation of Patrick’s fundamental right to fair hearing and his human right to receive information on the affairs of Oando and his interest and shares in Oando and more importantly instituted that within 90 days of the ruling Oando must convene an AGM for her shareholders.

The Securities and Exchange Commission (SEC) has denied the claim by Engr Patrick Ajudua, that he won a court case against the capital market apex regulator.

SEC disclosed in a statement it issued on Wednesday that there was never a time it was served with court processes with respect to the purported matter at the FCT High court.

It stated, “The attention of the Securities and Exchange Commission (the Commission) has been drawn to several publications in the media, where it is reported that a shareholder of OandoPlc, purportedly obtained a judgment from the Federal Capital Territory High Court against the Commission. The Commission wishes to inform the general public that it was never at any time served with court processes with respect to the purported matter at the FCT High court. The Commission will consequently take all necessary steps to verify and set aside the purported decision of the said Court.”

This denial is a clear affront to the Nigerian judiciary, implying that Honorable Justice O. A Musa who presided over the case made a judgement without giving SEC the opportunity to defend itself. This is contrary to court documents that has been sighted which indicate that SEC was served processes but did not appear in court.