Reps give 2 weeks ultimatum to SEC to resolve Oando shareholders’ impasse

House Committee on Capital Market and other Institutions on Tuesday issued a two weeks ultimatum to Securities and Exchange Commission (SEC) to resolve the impasse over Oando shareholders.

The Committee held separate meetings with management team of SEC, and representatives of Concerned Shareholders of Oando Plc, Nigeria and Proactive Shareholders Association, behind closed doors at the National Assembly complex, Abuja.

Tony Nwulu, deputy chairman House Committee on Capital Market and other Institutions who chaired the interactive session, however threatened that the Committee will be compelled to conduct open investigative public hearing if the Commission fails to resolve the reconcile the parties within the timeline.

Stakeholders who spoke after the intervention of the Committee, expressed optimism on peaceful resolution of the crisis adding that the “show of confidentiality is how these petitions should have been treated by the SEC from the beginning.

“The strict timeline that the Committee has given for the enquiry to be concluded is another positive as this case has dragged on for nearly five months and played out in the media for 3 months, in that time Oando shareholders have seen a significant loss in the value of their shares. The lawmakers must be applauded for intervening.

“We are very hopeful that this new development will help resolve the issue in favor of all shareholders of the company, as we all want to see a conclusion that is in the interests of both we the shareholders and the future of the company,” he said.

The shareholders in the six page petition sent to the committee, frowned at the flagrant disregard for corporate governance and insider abuse.

Olufemi Timothy, President, Rennaisance Stakeholders Association of Nigeria Incorporated, who accused the regulators including SEC and Financial Reporting Council of Nigeria (FRCN) of being complacent in the discharge of their constitutional mandates, called for independent probe of the accounts of the company.

He alleged that the company has not been paying dividends to the shareholders since 2013 financial year, adding that the “external auditor’s report reported strong doubtful going concern of the Group page annual financial statement.

“The Group has negative working capital of over N263 billion consequence of current liabilities above, lighter than current assets, meaning that the management was unable to service its obligations financially.

“Claim of creditors is higher than the owners, shareholders equity, meaning that the group could be liquidated by the creditors anytime if urgent action is not taken.

“With accumulated losses of over N159 billion, shareholders could not get a dime as cash dividend. No hope of redeeming these reserved losses.

“Court cases as projected by the management may take claims of over N608 billion which is for greater the assets of the entire group, meaning that the group is at a very high risk of liquidation if the court cases against the company succeeds.

“Cost of litigations is very high. Litigation has damaging consequence on our company’s reputational risk under the current management. Management was increasing entitlements, remunerations despite lack of working capital.

“Both current liabilities and long term liabilities stood at over N799 billion. Management was selling assets of the company, especially money-spinning assets such as downstream (Marketing) business without meaningful improvement in debts situation. It was planning to sell its share in OER which unfortunately is the last asset belonging to the company,” the petition read in part.

They also urged the leadership of the House to “as a matter of urgency save our investment in Oando Plc, look into these matters, cause an action to intervene in Oando plc by ordering/remove the present management, to vacate office, allowing for proper investigation of the corporate governance abuses, financial mismanagement as noticed in the published full year audited financially statement.”

 
KEHINDE AKINTOLA, Abuja